Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH RAILWAYS (NO. 2) BILL

Read the Third time, and passed.

TEIGNMOUTH QUAY COMPANY BILL (By Order)

YORK CITY COUNCIL BILL [Lords] (By Order)

CARDIFF BAY BARRAGE BILL (By Order)

FALMOUTH CONTAINER TERMINAL BILL (By Order)

PORT OF TYNE BILL [Lords] (By Order)

AVON LIGHT RAIL TRANSIT BILL [Lords]
(By Order)

Orders for Second Reading read.

To be read a Second time on Thursday 27 October.

LONDON LOCAL AUTHORITIES BlLL [Lords]
(By Order)

Read a Second time, and committed.

BIRMINGHAM CITY COUNCIL BILL

Ordered,
That notwithstanding that the Birmingham City Council Bill was taken into consideration by the Committee on the Bill before a report from the Attorny General on the Bill had been presented to the House pursuant to paragraph (1) of Standing Order 158 (Bills affecting charities or educational foundations) the proceedings of the Committee be deemed to have been taken in compliance with that Standing Order.—[The Chairman of Ways and Means.]

BARLOW CLOWES

Return ordered,
of the Report of Sir Godfray Le Quesne Q.C., to the Secretary of State for Trade and Industry on Barlow Clowes.—[Mr. Newton.]

Oral Answers to Questions — AGRICULTURE, FISHERIES AND FOOD

Aboriginal Whaling

Mr. Harris: To ask the Minister of Agriculture, Fisheries and Food whether he will take further action to restrict aboriginal whaling.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Donald Thompson): We will go on insisting in the International Whaling Commission that the taking of whales by aboriginal communities continues to be very closely regulated. And

the numbers permitted to be taken should be consistent with scientific advice on the status of the stocks. We will also continue to press for any necessary improvement in monitoring such whaling or in hunting methods employed.

Mr. Harris: While welcoming the tremendous international interest in the efforts that are taking place to rescue the three whales off Alaska, may I ask whether my hon. Friend agrees that the best way in which we can save the whale population as a whole is through organisations such as the International Whaling Commission? Does he think that possibly the time has come when we should stop whaling altogether?

Mr. Thompson: The United Kingdom Government's record on whaling is second to none, and we support the International Whaling Commission in all its efforts. However, many aboriginal communities still live off the whale and depend on it for their whole lifestyle. It would be wrong to think of those communities becoming dependent on the state rather than on their own commerce and industry. Nevertheless, I agree with the broad thrust of my hon. Friend's suggestion.

Mr. Tony Banks: I associate myself with the views of the hon. Member for St. Ives (Mr. Harris). I am sure that there is enormous support on both sides of the House for the banning of all whaling. As certain aboriginal communities clearly depend on whale hunting, would it not be appropriate for countries such as our own to give them adequate financial compensation, so that they will not have to make any sacrifices in achieving something that we want? It will be very useful if the Minister can send a message to the United States Government, commending them for their noble efforts in trying to save the three grey whales in Alaska.

Mr. Thompson: I am sure that those associated with the United States Government read Hansard very carefully and will be pleased and surprised to learn of that last comment by the hon. Member for Newham, North-West (Mr. Banks). They need not have me slingshotted all the way across to Alaska. Besides, I have enough to do.
I cannot entirely agree with the hon. Gentleman's first suggestion, which was that we should put aboriginal communities on the dole, as it were, rather than let them follow their natural and long-established commercial practices. There is a time period over which we can change old-fashioned industries to modern ones. As we in the House all know, that pays dividends in the long run.

Common Fisheries Policy

Sir Michael Shaw: To ask the Minister of Agriculture, Fisheries and Food what is his assessment of the effectiveness of current policing of the common fisheries policy.

The Minister of Agriculture, Fisheries and Food (Mr. John MacGregor): As my hon. Friend knows, the United Kingdom Government have always taken the lead in advocating effective measures for enforcing the common fisheries policy. There are clear signs that other EC member states are now taking the steps necessary, as we have done, to achieve proper enforcement.

Sir Michael Shaw: Is my right hon. Friend aware that, while the industry as a whole appreciates that better steps


are now being taken, in some countries those steps are being taken from a very low base? There is still anxiety, particularly in this country, about the reduction in quotas, which is causing real hardship to many of our fishermen.

Mr. MacGregor: We take steps to reduce quotas only when scientific advice suggests that it is necessary for the long-term conservation of stocks, which is clearly in the interests of our own fishermen. As for enforcement, I am sure my hon. Friend has noticed that the Netherlands, for example, has made a big increase in the manpower of its inspection service, has strengthened its control system, is improving restrictions on its fleet's capacity and effort and is taking a number of its fishermen to court. There is no doubt that considerable efforts have been made in that country.
We are very vigilant. A recent problem related to reports of quota hopping by one or two member states, but I am glad to say that action on that was agreed at yesterday's Council.

Farming Unions

Mr. Geraint Howells: To ask the Minister of Agriculture, Fisheries and Food when he last met representatives of farming unions to discuss the state of the agriculture industry.

Mr. MacGregor: I meet representatives of the farming unions frequently to discuss agricultural matters. For example, I have met many of them from different parts of the country, including the president, on various occasions in the last fortnight alone.

Mr. Howells: What plans has the Minister to ease financial pressures on our agriculture so that it can compete on equal terms with its counterparts in Europe?

Mr. MacGregor: I am aware that in some sectors of the industry there are problems of declining incomes, and that others, such as the pig industry, also have real difficulties —although that is the case throughout the European Community. On the other hand, some sectors have experienced improvements in incomes in the past year or so, and in one or two earlier years. The overall picture is not one of declining incomes.
Obviously there have been pressures as we have dealt with the reforms of the CAP—which the hon. Gentleman, I think, agrees are necessary—but in this year's price negotiations we secured a better outcome on green currencies for the United Kingdom than for any other country, and it will come into operation on 1 January. That of itself will add £120 million to United Kingdom farm incomes.

Mr. Marland: Is my right hon. Friend aware that there is genuine concern among British farmers that our green pound may not achieve parity by 1992? The fear is that if it does not do so by then some Socialist Eurocrat may decide to freeze values as they are, in which case it would never do so. Can my right hon. Friend reassure the farmers that he will maintain pressure for devaluing the green pound?

Mr. MacGregor: Yes, I can. As my hon. Friend knows, the Commission and the Council have both committed themselves this year to the phasing out of MCAs and their elimination by 1992. I have made it clear that I strongly

support that, and that I do not believe that there can be a proper single market in agriculture unless it is done. I assure my hon. Friend that I shall use every appropriate opportunity to continue working to that end.

Mr. Martyn Jones: In view of his further rejection of direct income aid at the last Agriculture Council—which, I believe, took place a couple of days ago—has the Minister any plans to help hill farmers in my constituency to keep up their incomes, which are among those that are diminishing?

Mr. MacGregor: I was by no means alone in making some strong criticisms of the Commission's current proposals for a direct income-aid scheme. Many other Ministers, including those from some of the bigger countries, also chimed in with different criticisms. I believe that the current proposals would not be cost effective, are not directed at the right ends and do not fulfil all the conditions that we were asked to carry out.

Rev. Ian Paisley: Will the Minister inform the House of the present position on his promise that he would work towards the elimination of pigmeat MCAs? Is he aware of the proposals now being ventilated in Europe concerning changes in sheepmeat and beef regimes, which would result in serious agricultural conditions in Northern Ireland? Will he keep in mind that feed stocks for the intensive sector in Northern Ireland are now soaring almost out of control, and that the intensive farmers are in great difficulties?

Mr. MacGregor: I argued strongly, and with some good arguments, for the elimination of pigmeat MCAs as quickly as possible. There was still a blocking minority on that, but I am sure the hon. Gentleman will be delighted to know that, as a result of the changes that we did secure, pigmeat MCAs will be down to zero on 1 January if sterling remains at its current level. That is a big change from a negative MCA of 28 points only about 18 months ago.
On the hon. Gentleman's second point, the proposals have just been presented to the Council. We had a brief discussion about them earlier this week and I believe that it will be a long negotiation. I shall certainly be fighting hard for all the United Kingdom's legitimate interests.
On the third point, the particular problem has been the American drought and its effect on soya, which has had an effect on feedstuffs for the intensive livestock sector—a problem that exists throughout the EC and elsewhere. I understand the problems that that unfortunate element is creating for our producers.

Dr. David Clark: When the Minister met the farming unions' leaders, did he discuss with them the Commission's proposals to abolish the sheep variable premium and the consequential increase in the ewe premium? Will he confirm that the ewe premium will be based on a European, not a British, level, and that many farmers will get only half as much as they are expecting? If that is the case, how will the Minister ensure that we keep sheep farming in the hills and keep the areas attractive for people to enjoy and live in?

Mr. MacGregor: As I said earlier, I think that we shall have some complex negotiations on the sheepmeat proposals. There were criticisms from many sides, so I suspect that we shall see changes as they go through.
However, it is early days to be sure about that, as we have had only the most preliminary reactions. It is clear that budgetary discipline has to apply to the sheepmeat sector as to any other, and costs have been rising considerably. However, within that overall requirement, I am determined to ensure that we secure the best possible arrangements, which may well include the continuation of the variable premium. We have still to negotiate that. I am determined to ensure that we secure the best possible arrangements in the new regime for the United Kingdom sheep producers.

Mr. Charles Wardle: Can my right hon. Friend reassure NFU members who are milk producers that Britain's highly efficient Milk Marketing Board will not be subjected to the reforming zeal of EC bureaucrats?

Mr. MacGregor: From time to time there have been problems in ensuring that the Milk Marketing Board conforms with Community requirements, but, as far as I can recall, the main issue in that respect does not arise from the EC, but may follow from a court case in Northern Ireland, on which I cannot comment because it is sub judice. That is the issue to which the Milk Marketing Board may have to address itself before too long.

Milk Quotas

Mr. Matthew Taylor: To ask the Minister of Agriculture, Fisheries and Food if he has had any representations regarding the implementation of the Agriculture Act 1986 concerning compensation for milk quotas.

Mr. Donald Thompson: I have received a number of representations on this subject.

Mr. Taylor: Is the Minister aware that real hardship is being caused to tenants by excessive delays in the payment of compensation by some landlords? Does he agree that that could be best tackled by requiring interest to be paid on that compensation?

Mr. Thompson: I know very well the hon. Gentleman's concern for the matter in general and for some of his constituents in particular—and why not? I have with me the relevant correspondence. The matter is best settled by arbitration. Some cases will have to go to court, and that is the time when interest can be discussed.

Mr. Maxwell-Hyslop: I wrote to my right hon. Friend the Minister for Agriculture, Fisheries and Food on a specific question and asked him to take it up personally with the Chancellor of the Exchequer. In some parts of the country the commissioners of Customs and Excise are trying to charge value added tax on those compensation payments, which is wholly outwith the undertaking given by the previous Minister for Agriculture, Fisheries and Food when they were introduced. Can my hon. Friend tell me what progress the Minister has made in his representations to the Chancellor of the Exchequer on that important matter?

Mr. Thompson: My right hon. Friend received my hon. Friend's letter last night and we have managed to have only the briefest of discussions on it. However, my right hon. Friend will be writing to the Chancellor of the Exchequer and others on that important matter.

Mr. Molyneaux: Has the Ministry entirely forgotten about the additional quota that was allocated to Northern Ireland, which seems to have been misappropriated and distributed over the whole of the United Kingdom?

Mr. Thompson: These questions seem to run on for a long time in Northern Ireland. I think that I have answered this question on about four previous occasions. The answer has not altered. I can see no hope of a future re-distribution.

Mr. Nicholas Bennett: In view of the substantial decline of the surplus of dairy products, does my hon Friend envisage that there will be further cuts in the milk quota?

Mr. Thompson: The substantial decline in milk products came about on purpose. Therefore, we shall monitor very carefully the supplies of milk, butter, skimmed milk powder and other dairy products and, in consultation with our European partners, review the position.

Water Pollution

Mr. Pike: To ask the Minister of Agriculture, Fisheries and Food what further steps he is taking to reduce water pollution from farm sources; and if he will make a statement.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Richard Ryder): In our response to the Environment Committee's third special report the Government announced a number of measures to deal with the farm pollution problem, including a commitment to draw up regulations to ensure proper containment of silage and slurry.

Mr. Pike: I congratulate the Minister on his first reply from the Dispatch Box. I am sure he will be aware that in many parts of the country nitrate in the water supplies is already at an unacceptably high level. There are problems in the aquifers, which will show up for some considerable time. What steps do the Government intend to take to introduce protection zones and to encourage the proper use of nitrates by farmers and environment-friendly farming?

Mr. Ryder: I thank the hon. Gentleman for his kind words. The Government are looking at a range of options. We have not yet reached any conclusions, and before we do we shall consult various bodies. We look forward to finalising those conclusions in the relatively near future.

Mr. Conway: Does my hon. Friend agree that the attitude of the National Farmers Union and the Country Landowners Association to nitrogen pollution is positive? We are getting fed up with the Opposition kicking the farmers round the block all the time. The farmers—not the whingers opposite—are the true safeguarders of the environment.

Mr. Ryder: My hon. Friend is quite right. I particularly welcomed the speech made last month by Mr. David Naish, the vice-president of the NFU, in which he warned farmers that by continuing to pollute the rivers they were undermining their reputation in the countryside. Also, I draw attention to the fact that the maximum fines


available to the courts for farmers who pollute the countryside are £2,000 and that many courts are not using those full penalties.

Mr. Duffy: Is the Minister aware that farming pollution has risen steadily in Yorkshire and Humberside in recent years and that the Yorkshire water authority has been hampered by that extraordinary section in the Control of Pollution Act 1974 that he apparently has in mind? Is the Minister saying that his right hon. Friend intends to repeal that section, which has enabled farmers to evade prosecution if they pleaded acts of omission arising from good agricultural practice? A similar defence was not available for industrial spillage.

Mr. Ryder: The hon. Gentleman has misunderstood my reply. I was reminding the House that £2,000 is the maximum penalty for polluting the countryside and that the courts are not using the maximum penalty. In the south-west, which has one of the worst pollution problems, the average fines that are dished out by the courts are £140, so it is quite clear that those penalties are not being used.

Mr. Michael Brown: I congratulate my hon. Friend on his appointment. After so many years, we are delighted to hear his voice again in the Chamber. Does he agree that there is a far greater danger of water pollution from fluoride than from nitrates?

Mr. Ryder: I thank my hon. Friend for his kind remarks. He knows that my views on fluoride do not coincide with his.

Mr. Ron Davies: I offer the Minister the Opposition Front Bench's congratulations on his appointment.
As the Minister clearly recognises that there is a problem with nitrate pollution, can he explain why the Government are embarking on a programme of cuts in research and development, much of which is directly related to optimising fertiliser application and therefore minimising pollution risks? Will he confirm that if the Barnes report is accepted, about 1,000 scientists, many of whom work on environmental protection, will be sacked? In view of the Prime Minister's recent conversion to the cause of environmental protection, does he think that he ought to ensure that his Department's actions support her views?

Mr. Ryder: I thank the hon. Gentleman for his kind words of welcome.
In part, the answer to the hon. Gentleman's question depends on the amount of industry funding. I emphasise that Britain has an excellent record in this sphere—we spend more money than any other country in Europe bar Germany on research into pollution. We aim to keep up to that mark.

Bass

Mr. Summerson: To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to protect the bass nursery stocks.

Mr. Donald Thompson: As I announced on 27 July, we shall increase the minimum landing size for bass and introduce restrictions on the use of gill and similar nets with a mesh size between 65mm and 89mm. These

measures are to take effect from 1 January 1990. There will be further consultations with local interests about establishing nursery areas to protect juvenile bass stocks.

Mr. Summerson: I thank my hon. Friend for that reply. He will be aware that sea bass is a slow-growing fish and that it is essential that stocks be conserved. Will he therefore consider the matter rather more urgently and designate nursery areas for these fish to come into effect before 1990?

Mr. Thompson: The matter is complicated because of the various sections of the community who have an interest in bass stocks and catch bass. I think that it will take a couple of years before we can reconcile the various interests.

Mr. Ward: My hon. Friend will be aware that fishermen on the south coast are not convinced of the need for the measures that he is about to introduce. More important is the fact that the measures will not apply to our EEC partners. That seems to be one more example of unfair competition with other members of the Community. On reflection, will my hon. Friend agree to withhold the new measures until they are applied throughout the EEC? Will he ensure that fishermen in places such as Poole are given the maximum, not the minimum, time to make the adjustments?

Mr. Thompson: You, Mr. Speaker, have just heard both sides of the argument. It is vital that bass stocks be protected from as early a date as possible after proper negotiations. We must try to persuade the Europeans to come along with us while we are trying to persuade some of my hon. Friend's constituents to be more enthusiastic about the future of the industry on which they place such great reliance.

NFU Horticulture Committee

Mr. Jack: To ask the Minister of Agriculture, Fisheries and Food when he last met the chairman of the National Farmers Union horticulture committee; and what matters were discussed.

Mr. MacGregor: My noble Friend the Parliamentary Secretary last met the chairman of the NFU horticulture committee on 20 September, when the main subject under discussion was horticultural research.

Mr. Jack: My right hon. Friend will be aware of the considerable concerns expressed in horticulture about his proposals for revised funding arrangements. This is a highly competitive industry. Can my right hon. Friend give me an assurance that any changes to the funding arrangements will be phased in to allow the industry adequate time to adjust to the new regime?

Mr. MacGregor: There is a later question on the Order Paper about research and development generally, but it is entirely right to ask the industry—whatever the sector—to undertake more of the near-market research. I recognise that a higher proportion of horticultural research and development has been classified as near-market because a high proportion of the work is close to commercial application. We are engaged in intensive discussions with the horticulture industry on this point, and I can tell my hon. Friend that timing is one of the matters that are being discussed.

Ms. Armstrong: I wonder whether the Minister will give some definition of precisely what is meant by near-market research for horticulture? Most of the horticulturists whom I have met in my constituency are bewildered. They have pursued the matter with the Ministry, but they are no nearer to understanding precisely what it is that they have been asked to do. They feel, and I support them, that 60 per cent. from the industry within the next three years is the death knell for it.

Mr. MacGregor: That is a big exaggeration. The broad definition of near-market research is that it is work that offers the possibility of commercial exploitation or application within a short enough time to justify investment by industry. That is what is happening in many industries outside horticulture and agriculture. We have specified in detail the kind of research projects that we believe come within the definition of near-market research. That is one of the subjects that is also part of the discussion with the industry—to agree on which of the projects should come within the definition.

Mrs. Roe: Is my right hon. Friend aware that Hatfield polytechnic has recently launched a unique, new BSc degree course in horticulture, in collaboration with Writtle agricultural college? It is the first horticultural degree course that has been mounted outside the university system. Will my right hon. Friend take the opportunity to congratulate all those involved in the initiative, which will provide a steady stream of highly trained experts to ensure that horticulture is equipped to meet the challenges of the 1990s and beyond?

Mr. MacGregor: I am grateful to my hon. Friend for raising that matter. I am happy to congratulate those involved.
Many sectors of horticulture are facing expanding markets. It is important that they are competitive and that they meet the changing requirements of consumers. I am sure that the higher the skills involved, the better placed the industry will be.

Ministry's Centenary

Mr. Lord: To ask the Minister of Agriculture, Fisheries and Food what plans his Ministry has to mark its centenary during 1989.

Mr. MacGregor: The Ministry will be arranging a number of events which will be co-ordinated with the programme for Food and Farming Year, which also takes place in 1989. There will be exhibitions in London and in the regions, a centenary history of the Ministry and a special centenary appeal in aid of the Save the Children Fund.

Mr. Lord: I thank my right hon. Friend for that answer. Many hon. Members can probably remember the days of food rationing—[HON. MEMBERS: "Speak for yourself".] I am not speaking personally. Will not the celebrations present us with an ideal opportunity to congratulate all farmers on the magnificent efforts that they have made over the years to provide the country with sufficient food —always at the urging of Conservative Governments?

Mr. MacGregor: I entirely agree. One of the problems is that because we have had to grapple with the farmers' success and the penalties that that has brought, with

surpluses and the CAP, there has been too much public emphasis on the problems of the CAP and not enough on the contributions that have been made by our farmers and food industry over the past 40 years. Especially in the past few years, the range and quality of food have been improving and the price increases of food are well below the general level of the RPI. There is a good record on production, quality, price and exports, and I believe that 1989 will give us a good opportunity to put that ease across.

Mr. Grocott: Will the Minister find time to reflect in the centenary year that for most of the past 100 years Britain's food policy was determined in Britain and not in Brussels? Does he agree with me that consumers were better served when the policy was determined in Britain?

Mr. MacGregor: It is the case that we have moved faster towards self-sufficiency in those products that we can grow in the past 10 years than in earlier periods. Our farmers have used the opportunity of entering the Community to continue to expand our food production.

Sir Charles Morrison: To ensure that the Ministry of Agriculture, Fisheries and Food and the industry can celebrate their bicentenary, will my right hon. Friend mark his Ministry's centenary by ensuring that he extracts from the Treasury adequate resources for agricultural research, in the interests both of farm production and of the countryside?

Mr. MacGregor: My hon. Friend will know that a large contribution is made to agriculture, food and fisheries research and development from public funds at present. The sum is currently running at about £200 million a year, which is a substantial contribution.

Mr. Skinner: I wonder whether, when this centenary is celebrated, a plaque will be unveiled on the wall of the Ministry of Agriculture, Fisheries and Food and whether tribute will be paid to this industry, subsidised during the whole course of its 100 years. Will the Minister tell us what the exact amount of subsidy has been over the past 10 years, during which the Prime Minister and the Cabinet have talked about leaving matters to market forces, and during which time more than £10 billion has been ploughed into the industry from the taxpayer?

Mr. MacGregor: The figure has been too high, especially in relation to the production of surpluses. That is why we have been playing a leading part in the Community in achieving the reform of the common agricultural policy. As a result of our recent efforts, savings of more than £1,000 million will be made over the next four years in the United Kingdom alone, compared with what would have happened had we not undertaken the reforms.

Farm Diversification Grants

Mr. Paice: To ask the Minister of Agriculture, Fisheries and Food what types of projects have been most popular among farmers applying for farm diversification grants.

Mr. Ryder: Good quality holiday accommodation accounts for just over 30 per cent. of applications and recreational and educational facilities for about 20 per


cent. Food processing, farm shops and livery are also popular choices; indeed, there is a widespread interest in most of the enterprise for which grant-aid is available.

Mr. Paice: I thank my hon. Friend and welcome him to his new post, but may I suggest that many of the ventures that he described—indeed, probably all of them—could lead to many farmers falling foul of the planning legislation and that there is a great need to give guidance to farmers on planning and for a much more open-minded approach on the part of many planning and highway authorities?

Mr. Ryder: I thank my hon. Friend for his kind welcome. I agree with his judgment of farmers' appreciation and understanding of planning laws. It is precisely for that reason that we shall be publishing a farmers' guide and leaflets dealing with the planning system later this year. I very much hope that they will help farmers to understand the planning system better.

Mr. Allen McKay: In diversification, what emphasis is being given to organic farming?

Mr. Ryder: The answer is, "None at the moment."

Sir Geoffrey Johnson Smith: How sure is my hon. Friend that the most popular diversification grant will not go towards housing, and what safeguards can he give?

Mr. Ryder: I can give my hon. Friend an assurance that diversification grants do not go towards housing. On the other hand, I would point out that there is one grant which to the best of my knowledge, has not been made so far, and that is a grant for martial arts.

Sea Fish Industry Authority

Mr. Worthington: To ask the Minister of Agriculture, Fisheries and Food when he last met the chairman of the Sea Fish Industry Authority; and what subjects were discussed.

Mr. Donald Thompson: I have not yet had an opportunity, since assuming my new responsibilities, of meeting the chairman of the Sea Fish Industry Authority, but look forward to doing so soon.

Mr. Worthington: I hope that the Minister will meet the SFIA chairman very soon, and that during that meeting he will impress on him the need for him to meet the leaders of fishermen's organisations and to involve them fully in the training programmes that are to be mounted. The Minister will be aware that the European Community is urging that there should be training programmes across the EC, but it is crucial that those training programmes should meet local needs. Will the Minister do what I ask?

Mr. Thompson: I am glad to welcome a question such as that. I agree with every word of it in thought and substance.

Dr. Godman: When the Minister meets the chairman of the Sea Fish Industry Authority, will he offer that gentleman the assurance that the Government have no intention whatever of abandoning the vessel building scheme? May I point out to him that there is growing concern among fishermen that the Government intend to

abandon the scheme, except to provide replacement vessels for vessels lost at sea. Will he, here and now, dispel those genuine and growing fears of our fishermen?

Mr. Thompson: The Government put no restrictions on people building their own boats. However, there is an EC moratorium on the priorities for boat building. We have to consider the size of the British and European fleets. It would be ridiculous to continue building bigger, better and faster boats with greater capacity for a diminishing fish stock. We must put conservation first and boat building second.

Set-aside Scheme

Mr. Andrew Mitchell: To ask the Minister of Agriculture, Fisheries and Food what the response of farmerss has been to the set-aside scheme launched in June.

Mr. MacGregor: The response has been satisfactory. I will be announcing figures of applications and registrations as soon as they are available following the 21 October closing date

Mr. Mitchell: Does my right hon. Friend accept that there may be substantial environmental benefits from a temporary policy of land set-aside? All too often, modern farming practices can result in the destruction of our great national landscapes and habitats.

Mr. MacGregor: I very much agree that there are big opportunities through set-aside for those environmental benefits. In drawing up the scheme I was very careful to have environmental conditions written into it which will help to ensure that. One interesting point from our early analysis of applications received is that the most popular choice so far is permanent fallow. I hope that farmers who undertake set-aside through permanent fallow will use the opportunity to improve the conservation value of land set aside in precisely the way that my hon. Friend has described.

Mr. Cryer: Are the Government thinking of introducing a set-aside scheme for factory owners whose factories have been set aside under this Government, causing the loss of 2 million jobs in less than 10 years? Will the set-aside scheme giving farmers up to £ 100 an acre for watching the grass grow apply only to farmers? Is it being denied to City institutions with offices in Mayfair which are taking Government money? They do not even see the grass grow—they are too far away.

Mr. MacGregor: It applies to all those who actually farm the land. There is a cost involved in looking after land and keeping it in good agricultural condition as well as environmentally attractive. The set-aside payments recognise that cost.

Country Landowners Association

Mr. Marland: To ask the Minister of Agriculture, Fisheries and Food when he last met the president of the Country Landowners Association; and what subjects they discussed.

Mr. MacGregor: I last met the president of the Country Landowners Association on 5 October. We discussed various matters of mutual interest.

Mr. Marland: My right hon. Friend will know how enthusiastic the Country Landowners Association is that voluntary set-aside should succeed. Although it is now almost too late for arable farmers to register for set-aside, is there a message that my right hon. Friend would like the CLA and hon. Members to convey to arable farmers who would like to register at this late stage?

Mr. MacGregor: Yes. I know that the CLA has been very helpful. I have been seen press reports that suggest that the president of the CLA has applied to set aside part of his land. The CLA is also helpful in assisting us to monitor—indeed, it will do some monitoring for us—what some people fear might be a problem in relation to tenants on set-aside land. I do not think that there is a problem yet, but the monitoring will be helpful. Although registrations have to be in by the closing date, that is only to help farmers who may wish to apply for set-aside in future years. It will still be possible for them to do that, but it will be more difficult if they do not register.

Mr. Campbell-Savours: How does the Minister respond to the CLA's latest proposals for an automatic system of compensation for land blighted during nuclear incidents such as Chernobyl?

Mr. MacGregor: We are looking at several proposals made by the CLA, and my hon. Friend the Parliamentary Secretary will meet the CLA at the end of the month.

Mr. Gale: Bearing in mind the recent anniversary of the October hurricane, did my right hon. Friend take the opportunity to discuss with the CLA the number of trees still lying on the land, particularly in Kent? Was he able to reassure the CLA that his efforts will continue unabated until the trees are removed and new trees are planted in their place?

Mr. MacGregor: I have not only discussed that with the CLA, but, to coincide with the anniversary, I have visited many areas that have been affected. Although I recognise the difficulties, substantial efforts have been made by woodland owners and others to do the clearing up, and I believe that by early next year we may well see half the clearing up done. There is also a good prospective take-up of the schemes that we have introduced to help with replanting.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Beaumont-Dark: To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today, including one with the Premier of the State of South Australia.

Mr. Beaumont-Dark: Does my right hon. Friend accept that the television and radio strictures upon Sinn Fein, the propaganda arm of that evil machine the IRA, have been widely welcomed in the country, as it has in the House, among thinking and feeling people? Will my right hon. Friend also accept that that is only one step on the road to

its defeat, because anybody standing for public office in the United Kingdom should have to swear an oath renouncing violence and upholding the primacy of Parliament and the ballot box?

The Prime Minister: I am grateful to my hon. Friend and agree that the measures announced yesterday have been widely welcomed in the country by people who do not wish terrorists to have direct access to the broadcasting media. On the second point about those who wish to stand for local elections taking an oath to renounce violence, a similar proposal was put forward previously by my right hon. Friend the Secretary of State for Northern Ireland. If we go ahead with it, we shall do so by way of legislation and introduce it at the earliest opportunity.

Mr. Kinnock: In the argument between those who want to raise child benefit and those who want to freeze it, on which side is the Prime Minister?

The Prime Minister: The right hon. Gentleman knows full well that child benefit is reviewed every year. He knows that there will be an anouncement at the proper time. He knows what the proper time is, and he must await it accordingly.

Mr. Kinnock: Child benefit was reviewed last year and resulted in its being frozen. I am not asking for detail from the Prime Minister, I am asking for a statement of principle from her. Does she want to raise child benefit, or does she want to freeze it? How can a Government give £3 billion to top-rate taxpayers and not give an undertaking to increase child benefit?

The Prime Minister: This year, as the right hon. Gentleman is aware, we directed £200 million in net extra resources to families in income-related benefits, especially for the children. That was against the £120 million that uprating child benefit this year would have cost. If the right hon. Gentleman wants a general increase in child benefit, it would also go to the topmost people on top tax.

Mr. John Greenway: To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Greenway: Is my right hon. Friend aware that her recent remarks in Bruges and in Brighton last week reflect the opinion held by the overwhelming majority of people in this country and, if the truth were known, throughout Europe? Does she agree that other European Heads of Government would do better to concentrate on practical measures towards economic progress and their agriculture policies rather than harp on about ideological European union ideas?

The Prime Minister: Yes. The speech was greeted by an avalanche of support, as well as some criticism. I firmly believe that the best way to secure forward movement in the European Community is by active co-operation between sovereign states. Furthermore, we have concentrated on practical measures, and in doing so have often been way ahead in achievements—beyond those who talk in woolly terms about European union.

Mr. Ashdown: Inflation is now running at four times the level of that in West Germany and is 50 per cent. above the


EEC average. Interest rates in Britain are nearly twice as high as they are in France and three times as high as in West Germany. Wage rates in Britain are rising two and a half times as fast as in France, and as an average are 50 per cent. higher than in the EEC. What grounds can there be for the Government's smug complacency about the economy?

The Prime Minister: I understand that the hon. Gentleman put a lot of work into his question, but he seems, at one and the same time, to be criticising both higher inflation rates and higher interest rates. Does he not know that the way to get inflation down is by higher interest rates?

Mr. Burt: To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Burt: Does my right hon. Friend agree that no responsible Western Government would allow the right to strike or trade union activity to interfere with the security services? Bearing in mind the disruption caused at GCHQ and the genuine efforts that the Government have made to deal with legitimate trade union concerns, is my right hon. Friend aware that the overwhelming majority of British people will fully support the necessary action that has recently been taken by the Government at GCHQ?

The Prime Minister: Yes. The original decision that we took on GCHQ was upheld by the highest court in the land and the European Court of Human Rights. As my hon. Friend the Minister of State, Foreign and Commonwealth Affairs, said in the House yesterday, about 10,000 man days were lost at GCHQ in the period 1979 to 1981 as a result of industrial action that had nothing to do with GCHQ. We have made strenuous efforts to accommodate those who did not uphold the new conditions of service. Only about 18 did not, while 7,000 people accepted those conditions. The action that we have taken is correct.

Ms. Short: Will the Prime Minister please explain what will seriously be achieved by not allowing the British people to hear and understand why both communities in Northern Ireland engage in violent conflict? At the time of the Anglo-Irish Agreement she promised reforms to reduce the alienation in Northern Ireland, but we have not seen them. We are now promised a series of measures that many of us believe will increase the conflict. Does she have a strategy to remove the causes of the violence, or will she allow it to rip under a blanket of censorship?

The Prime Minister: It would be a great help if we received full support for the measures that we have taken against terrorism, including the support of the Labour party for the Prevention of Terrorism Act.

Mrs. Roe: Following the Labour party's abject failure over the Dundee episode, does my right hon. Friend agree that Ford's recent announcement of investment at Bridgend shows that foreign firms believe in this country, which is good for jobs and for Britain?

The Prime Minister: Yes. We all welcome Ford's decision to site its main engine investment in this country. We were very concerned when forces in the trade union movement—though not in Scotland—stopped Ford from

going to Dundee. I am delighted that it has decided to make much investment in this country, which is a vote of confidence in the United Kingdom Government.

Mr. Roy Hughes: To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Hughes: Will there be any reconsideration of the Government's proposal to impose charges for eye tests? Does the right hon. Lady appreciate that there is particular worry about the plight of pensioners who, because of charges, will be deterred from seeking tests? Is she also aware that, because of that, there is a serious risk of an increase in the number of cases of glaucoma? Does the right hon. Lady realise that there is considerable concern on this issue among her Back Benchers? Bearing in mind the right hon. Lady's eye affliction some time ago, can she tell the House whether she shares that concern?

The Prime Minister: Those on low incomes will not have to pay the charge, as the hon. Gentleman is well aware. It seems reasonable that those who can afford to pay should pay about £3 twice a year on dental charges or up to £10 on spectacles, although competition among opticians may result in virtually no charge. The hon. Gentleman is aware of the enormous increase in prosperity this year. Indeed, the Labour party voted against tax reductions, including some that would have affected older people. It would seem reasonable that those who can afford it should pay this small, modest charge for something that is fundamental to their health.

Mr. Paice: Will my right hon. Friend confirm that if she were to undertake a 10-day speaking tour she would do so during the recess? Does she assume that the only reason why the hon. Member for Yeovil (Mr. Ashdown) waits until we reassemble is——

Mr. Speaker: Order. The hon. Member can ask questions only about the Prime Minister's responsibility. She is not responsible for that matter.

Mr. O'Brien: To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. O'Brien: The Prime Minister is well aware of the unfairness and cruelty that will be inflicted on people on low incomes when the poll tax is introduced. Is she aware of the unfairness and cruelty that will be inflicted on a pensioner couple when they will have to pay twice the poll tax while their income will be only 50 per cent. more than that of a single pensioner? Will the right hon. Lady do something to arrest this cruelty that will be inflicted on people on low incomes?

The Prime Minister: Community charge is the way of paying for a part of local government services. It is therefore an obligation that falls on all citizens unless they are unable, because of low income, to afford the whole amount, in which case they will get an 80 per cent. rebate. In the last resort, they will get an average of 20 per cent. of the community charge on their social security benefit to enable them to pay it. The hon. Gentleman loses sight of


the fact that it is a citizen's duty to pay towards the cost of local income and that there are full rebates for those on low incomes.

Mr. Stanbrook: To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Stanbrook: Will my right hon. Friend consider the suggestion that the ultimate solution to the problems of Northern Ireland lies in a re-drawing of the border, generous resettlement grants, its restriction to those British who wish to remain British, and thereafter its treatment on exactly the same terms as any other region of the United Kingdom?

The Prime Minister: We have not considered that approach. I do not think that it would work. There have been countries and incidents where it has worked in the past—for example, with Greece and Turkey afer the first world war—but previous efforts to do this in Northern Ireland have failed. We must carry on with our present pledge to the people of Northern Ireland, which is that there will be no change in their status, except at their wish

and through their express consent and the express consent of the House. Northern Ireland is part of the United Kingdom and must be governed in that way.

Mr. Haynes: To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Haynes: Does the Prime Minister remember lecturing the nation—something that she does quite regularly—on spending money that it does not have? Why, then, do she and her Chancellor encourage people to spend money that they do not have?

The Prime Minister: I congratulate the hon. Gentleman on being able so frequently to secure the last question at Prime Minister's Question Time. I do not know quite how he does it.
I do not think that it is right to encourage people to borrow more than they can afford—nor, I believe, does the hon. Gentleman. The steps that we have taken on interest rates will reduce borrowing and increase saving, and that is necessary both to get inflation down and to reduce the trade deficit. It is the right step to take.

Barlow Clowes

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Tony Newton): With permission, Mr. Speaker, I wish to make a statement on Barlow Clowes.
Many people have been badly affected by the collapse of the Barlow Clowes operations. The extent of the suffering and distress has been fully set out in the letters I and my colleagues have received from Members of both Houses and direct from those concerned. We share the deep concern expressed on all sides, and sympathise with those who have suffered loss.
The story is very complex: it stretches over many years and involves many different participants. The House will recall that, following my right hon. and noble Friend's statement on 13 June, he appointed Sir Godfray Le Quesne QC to prepare an independent report on the facts of the Departments handling of this matter. My right hon. and noble Friend is today publishing Sir Godfray's account, subject to minor deletions made on legal advice in order to avoid possible prejudice to criminal proceedings. His report is one of the most open and exhaustive ever volunteered by a Department of State into its handling of a matter of this kind, and contains a full account of the Department's role.
I should make it clear to the House that, while the Government attach importance to maintaining the normal rule that officials' confidential advice to Ministers should not be made public, we have decided that, in the quite exceptional circumstances of this case, it is in the public interest to include the submissions to Ministers and other material which would not normally be published. In accordance with normal practice, the names of officials involved have been excluded.
We are extremely grateful to Sir Godfray Le Quesne for the thoroughness and speed with which he produced his report. In accordance with his terms of reference, the report is purely factual. The Government have studied it with great care and have taken legal advice, including that of leading counsel, and I would now like to set out to the House the key events and our conclusions.
It is only possible to judge the events that occurred in the light of the regulatory system in place at the time. The legislative framework within which all but the final events of this case took place was based on an Act of 1939, which was consolidated in the Prevention of Fraud (Investments) Act 1958. There was very little change in the way it operated until 1983. Then, against the background of Professor Gower's much broader review of investor protection, commissioned in 1981, the Government introduced new regulations. These regulations required, among other things, first, much more information about prospective licence holders; secondly, a certificate from a qualified auditor as to the firm's ability to operate as a going concern during the lifetime of the licence; and thirdly, regular financial monitoring returns, verified by a qualified auditor, covering the proper holding of client money and investments. The regulations were designed to enable the Department to rely on the verification of prescribed information by qualified auditors and solicitors.
Sir Godfray's report shows that Barlow Clowes first came to the Department's attention in 1975–76. It received

advice which, due to a misunderstanding within the Department, did not adequately cover the point at issue and it did not then apply for a licence to deal in securities. The consequences of this have been carefully examined. Had it applied in 1975–76, it is almost certain that a licence would have been granted, given practice at the time. If Barlow Clowes had received a licence in 1975–76, the first monitoring return of the sort I have described would have been required by the end of December 1984. In the event, Spicer and Pegler certified in July 1985 that it had obtained verification of the clients' investments and cash, and that the statement of clients' funds gave a true and fair view of their composition as at 28 December 1984. There is no reason to think that the fact that Barlow Clowes was not licensed in 1975 had any material effect on the course of subsequent events.
The partnership again came to the Department's attention in late 1983. The review and tightening up of the system in 1983 had brought large numbers of unlicensed dealers to light. Wholesale prosecution would have been unjustified and, as Sir Godfray's report explains, it was the policy to bring unlicensed firms into the regulatory net and to take other action only where there was evidence of wrongdoing or that investors' funds were at risk. The Department originally believed that the partnership was applying for membership of the National Association of Securities Dealers and Investment Managers (NASDIM), which would have meant that it did not need to be licensed directly by the Department. When it became apparent that the partnership was not doing so, the effective choice open to the Department lay between prosecution of Barlow Clowes for not holding a licence—the only sanction provided by the legislation—and licensing the firm if it could meet the regulatory requirements. As Barlow Clowes was a partnership, the Department—even where grounds existed—had no powers to investigate it or to apply for a winding-up order, nor was there any provision for intervening to protect investors' funds if a licence were refused.
The Department therefore decided to seek to bring the partnership within the regulatory framework. In doing so it had four main aims. The first was to subject the partnership to the conduct of business rules (strengthened in 1983), the second to secure examination of its affairs by qualified auditors, and the third to persuade the firm to incorporate a limited company so that the powers available under the Companies Acts would become available. Fourthly, it was also necessary for Barlow Clowes to make arrangements which satisfied the Bank of England that the partnership was not in breach of the Banking Act 1979. When all these objectives had been met, licences were issued in October 1985 to the partnership and the company. In issuing the licences the Department made clear to the Barlow Clowes' solicitors that it had been heavily influenced by the assurances received from or through them. The Department also took full account of the report from Spicer and Pegler on clients' funds as at December 1984.
In 1986 new licences were issued to Barlow Clowes after it had submitted applications accompanied by the verifications and auditors' certificates required by the legislation. Although the majority of the powers under the Financial Services Act 1986 did not come into force until 29 April 1988, stronger and wider powers of investigation contained in that Act became available on 18 December 1986.
By the time of Barlow Clowes' licence applications in 1987, the Department had received material from the stock exchange and others that caused concern about Barlow Clowes' United Kingdom business. The Department did not at that time have the power to apply for a winding-up without first conducting a statutory investigation. Even if there had been such a power, there was not at that stage sufficient evidence to be confident that an application to wind up the company would be successful.
The Department had three courses open to it. It could refuse the licence. This would have stopped the company from lawfully taking on new business. But because the Department could not apply for a winding-up, there would have been no way of securing existing investors' assets. This action could therefore have precipitated a disorderly collapse of the business, which would have damaged existing investors' interests—[HON. MEMBERS: "But that happened anyway."]
The second course was to grant the licence but immediately to issue notice of intention to revoke it. The company could have referred that to the licensed dealers tribunal, which would have meant that it could carry on trading until the tribunal had decided the case.
The Department therefore adopted the third possible course. This was to institute an investigation under the powers newly available under the Financial Services Act and to issue a new licence, subject to review, pending the outcome of that investigation. The investigation proceeded but even six months later, in April 1988, with all the information the investigators had by then uncovered, there were legal doubts whether sufficient grounds existed for a winding-up petition to succeed. By May 1988, the combination of the investigation and new information on the company's solvency had yielded enough evidence to secure a winding-up order.
We are informed by the liquidators of Barlow Clowes Gilt Managers that on current information investors are likely to receive in excess of 75p in the pound, and they are hoping to make a substantial distribution before Christmas.
I now turn to Barlow Clowes International. This company was based in Gibraltar, and was not licensed. Any offshore company dealing with expatriates, and not holding itself out as dealing in securities in the United Kingdom, would not need a licence. The question, therefore, is whether the Department had reason to believe that BCI required a licence. As Sir Godfray's report shows, no firm evidence came to the Department indicating that this was so, and the information provided by the United Kingdom company from 1984 to 1987 indicated that BCI serviced expatriates and non-residents. During this entire period there were no complaints from investors, no questions about whether BCI was licensed, no approaches from intermediaries that would have revealed that BCI was dealing with United Kingdom residents.
From 1984 the Department decided that, as part of its licensing function, it would adopt a policy of sample monitoring of advertising in the national and financial press. No advertisements from BCI came to light as a result of this monitoring. Subsequently, it has emerged that a single advertisement was placed by BCI in one general supplement of The Times devoted to Gibraltar. This was not picked up by the sampling system. It has since transpired that BCI received business as a result of advertisements placed by authorised intermediaries, not in

the general or financial press. These advertisements did not mention BCI, which was named only in subsequent private correspondence. No example of such correspondence was referred to the Department before the Barlow Clowes collapse.
The liquidators of Barlow Clowes International predict that there will be sufficient funds realised to make a distribution in excess of 30p in the pound. The complications in BCI will take some considerable time to resolve but the liquidators are hoping to make a small interim distribution early in 1989.
I should now like to turn to the main conclusion that the Government draws from Sir Godfray Le Quesne's report. Within the constraints of the old legislation and the information available to the Department at the time, the Department's general handling of the licensing of Barlow Clowes and Partners, and Barlow Clowes Gilt Managers Ltd., was careful and considered and its actions reasonable. Barlow Clowes International had no licence: only since the company collapsed has it emerged that its activities were such that it probably should not have operated without one. Sir Godfray's report shows that the Department did not have reason to know this.
I must also inform the House that the legal advice the Government have received on the question of liability to investors with all these businesses is clear. The Government have no legal liability.
In view of the hardship that has been caused, the Government have considered carefully whether there is a case for ex gratia compensation. The facts set out in Sir Godfray's report in the Government's view provide no grounds for concluding that the Department's handling of the matter was unreasonable or caused the losses experienced by investors, and therefore provide no justification for using taxpayers' money to fund compensation.
We are aware that the Parliamentary Commissioner for Administration has said he is considering whether to investigate complaints of maladministration in the Department's handling of the matter. My right hon. and noble Friend has today sent him a copy of Sir Godfray Le Quesne's report. If he decides, in the light of that, to carry out an investigation, the Government will, of course, co-operate fully with him and consider carefully any report he may make.
My right hon. and noble Friend is also sending copies of Sir Godfray's report to the Institute of Chartered Accountants in England and Wales, the Securities and Investments Board and FIMBRA, for them to see whether there are matters for them to consider.
It is all too clear from the account of events in Sir Godfray Le Quesne's report, and from the points I have made so far, that there were a number of significant weaknesses in the legislative framework of the Prevention of Fraud (Investments) Act 1958, even after the regulations were greatly tightened in 1983. There were no provisions for injunctions to slop unauthorised businesses or breaches of the rules, or powers to restrict business, safeguard assets or appoint trustees. Nor was it possible to investigate unincorporated investment businesses. The Government have acted to correct those weaknesses in the Financial Services Act 1986, whose main provisions came into effect in April this year. These improvements do not mean that the present system of investor protection is completely risk-free. No regulatory system can eliminate fraud or guarantee investors against loss. But the


legislative framework has been radically revised and strengthened since the chain of events covered by Sir Godfray's report took place.

Hon. Members: Resign.

Mr. Tony Blair: For the 11,000 investors in Barlow Clowes who have waited for more than four months for this report, who expected not only a factual narrative but some accompanying conclusions from Sir Godfray and who hoped, not for a set of ministerial excuses but for a statement of ministerial responsibility, this report will come as a profound and bitter disappointment. Their sense of grievance will be all the greater in that Sir Godfray's report is not the report that we were promised.
Will the right hon. Gentleman comment specifically on the following words of the Secretary of State:
This is an inquiry to determine the facts of what actually happened within the department and to determine whether or not the department is to blame in any way"—[Official Report, House of Lords, 13 June 1988; Vol. 498, c. 11.]
Why do we not have such a report? [HON. MEMBERS: "Yes, we have."] We have not. Why, instead of an independent objective judgment of the facts, have we been given the Government's shamefully partisan, self-serving interpretation of the facts? Does the right hon. Gentleman not know that it is all very well to refer to the parliamentary ombudsman, but that what the investors wanted above all today was some sense of finality—not to be shunted from one investigator to another in a game of ministerial pass-the-parcel?
As for the Minister's claim that Sir Godfray's report shows that the Department was not negligent, I ask him to deal specifically with the following points. From my brief examination of the report I believe that it bears out each one of them. Is it not true that when the licence was first issued to Barlow Clowes in October 1985 the Bank of England had raised objections to the company, and that NASDIM, the City watchdog, had said that Barlow Clowes was unsuitable for a licence? Is it not true also that the DTI had been given assurances and had discovered that they were false? Barlow Clowes had then been trading illegally for more than 12 months under the Prevention of Fraud (Investments) Act 1958. How on earth was it given a licence in 1985?
Is it not right to say that in 1986—and I ask the Minister to answer this point specifically—the stock exchange expressed misgivings? The deputy head of the Bank of England's banking division said that he thought that there was a possible "fraud". The accountants to Barlow Clowes said that they thought clients' money was being misused. The monitoring returns submitted to the DTI were, according to the Minister's own inspector, seriously inadequate—but the licence was reissued.
In 1987 the stock exchange inquiry report stated, as Sir Godfray says, that there were "serious doubts" about whether Barlow Clowes was fit and proper. The police investigated Barlow Clowes, according to Sir Godfray. The Inland Revenue investigated Barlow Clowes. The DTI sent in its own inspectors. Yet in October 1987, when virtually every single body, private or public, with any responsibility for regulation was shrieking warnings at the DTI, the licence was reissued.
Is it not further the case that when the monitoring returns came in from Barlow Clowes in December 1987 —as, again, Sir Godfray finds—they were unsigned, unaudited, and then the firm was allowed to trade for a further six months, taking in millions of pounds, until in May this year the new SIB shut down in three weeks what the Minister's Department had left open for three years? What about the "disorderly collapse" that happened then, in May 1988? I may tell the Minister that in the light of all that, confirmed by Le Quesne, his denial of any negligence on the part of his Department is so brazen that it is risible.
I turn to the question of the ombudsman. Will the Minister undertake that the Government will abide by any compensation order made? Does he agree that the ombudsman should look also at the offshore investors, who, I may tell the Minister, had their funds managed in the United Kingdom, advertised in the United Kingdom, and run by residents in the United Kingdom? Will the Minister also, even at this stage, accept a proposal that I believe would command support from all quarters of the House—that the Government are bound to have some liability and should be using their good offices now to convene all those with a potential liability so that the spectacle of long, drawn-out legal proceedings can be avoided and a proper lifeboat scheme mounted? Is that not both a fair and a wise course?
Finally, I may tell the Minister this. The file in my hand is only of letters that I have received from investors over the past few months. Many right hon. and hon. Members will have received similar letters. Those who sent them are not get-rich-quick speculators. I doubt that many of them are drawing £1,000 per week for living expenses. They are Britain's new class of investors. They are the elderly couple with an accumulated nest egg. They are the young couple who have been left a small inheritance, perhaps from the sale of their parents' home. They are the mine workers or steel workers made redundant. Is it not the case that they are the very people whom the Government have encouraged into the market place of investment? The question asked by thousands of Barlow Clowes investors who are victims of malpractice today is echoed by millions more in this country who fear that they may be victims of malpractice tomorrow. Will the Government stand by them, or will they let those investors fall? Today, they have their answer, but we on the Opposition side of the House will not let them down.

Mr. Newton: Let me seek to comment on the points made by the hon. Member for Sedgefield (Mr. Blair) in the order in which he raised them.
First, it was made entirely clear in Sir Godfray's terms of reference that the purpose of his inquiry was to establish the facts on which judgments could be made. Inescapably, in a matter of this kind, those judgments will differ. Manifestly—and I understand this—the hon. Gentleman's judgment differs from the Government's judgment, which I have outlined to the House. However, it is a comprehensive description of the facts, which I believe will assist everyone in the House in considering in detail—and I hope that people will study the report in detail—the sequence of events against the background of the legislation existing at the time. I repeat that that is a very important point.
I well understand that people would have preferred some sense of finality, to use the term employed by the hon. Gentleman. But it is in the nature of an event such as


this—with all the potential that it creates for legal action of various kinds—that it is very unlikely that one single statement can bring the sense of finality that he has sought. I certainly do not pretend that my statement could have done that today.
The hon. Gentleman raised a good many points about the detail of particular comments at particular times, which are set out clearly in the report. Let me make two observations that I do not consider were properly reflected in his remarks. First, as is very clear from the report, the majority of those comments did not come in the form of anything that could be construed as evidence in the context of the action that the hon. Gentleman suggests that we should have taken. [Interruption.] I hope that all hon. Members will study the report. It is very clear that in general what came to the Department consisted more of rumour and speculation than of evidence. The Department's duty was to seek to establish evidence on which proper decisions could be made, and that is what it sought to do.
Let me make it absolutely clear that there was no question of the Securities and Investments Board precipitating action that the Department had been unwilling to take. It was decided, in the light of powers that had become available at the end of April 1988, under new legislation passed by this Government, that the best way of producing an orderly conclusion—an orderly winding-up of Barlow Clowes—was for the SIB to take the action that it accordingly took.
There was some laughter in the House when I referred to the issue of a disorderly collapse, which was the likelihood under the previous powers on the occasions to which the hon. Gentleman has referred. The suggestion was made, I think probably from a sedentary position below the Gangway, that what happened was a disorderly collapse. Let me make the difference clear. What happened was a collapse in which a proper winding-up order was made in circumstances in which equitable dealing between all the investors in the companies could be secured. A disorderly collapse would have occurred if the Department had taken action that would have precipitated a position —[Interruption.] I hope that the House will listen to this point—[Interruption.]

Mr. Speaker: Order.

Mr. Newton: —which would have caused the collapse in circumstances in which no action could have been taken to safeguard and freeze the assets. The more sophisticated investors would have got all their money, and the rest would have got nothing. That is what I mean by a disorderly collapse, and that is one of the risks that the Department was concerned to avoid.
It is not for me to suggest what the Parliamentary Commissioner should investigate, how he should investigate it or what he should conclude, but I have no doubt that he will have noted the hon. Gentleman's comments.
Lastly, the hon. Gentleman asked me what view the Government took of the need to ensure proper protection for that growing army of investors that we are rightly proud of having brought about. The answer is that we have already passed a comprehensive Act which has dramatically improved the framework of regulation in this

whole sphere—and that comes after a period in which the Labour Government, as far as I can discover, did nothing whatever with a framework that went back to 1939.

Sir William Clark: Is my right hon. Friend aware that most hon. Members will have sympathy with him in handling this case when he was not in the Department when all these things happened? Does he agree that when the DTI had its reservations about Barlow Clowes, without winding it up with a disorderly collapse or whatever, the advice from the civil servants to Barlow Clowes should have been "Don't take any more investments from the public until we have satisfied ourselves that you are safe and sound as an investment instrument"?
The report refers to expatriates, but, in all kindness to my right hon. Friend, I can assure him that the investors in Barlow Clowes who live in my constituency are not expatriates. Consequently, for civil servants to suggest that the overseas fund was being used only by expatriates really is beyond belief.
Secondly, many invested their money unwittingly not knowing the full facts, yet those facts were known by the Department, which had reservations. Not giving that advice must be a dereliction of duty. Can my right hon. Friend assure the House that whichever officials were responsible for that dereliction of duty are no longer in that section?

Mr. Newton: First, there must have been a risk, which would have weighed with the Department, that action during most of the period of the kind for which my hon. Friend asked in the first part of his question would itself have contributed to the company's collapse, and that would necessarily have been a disorderly collapse, given the legal framework at the time.
Of course, I am not suggesting that my hon. Friend's constituents, or the many others who so unhappily have been caught up in this wretched business, are expatriates, because manifestly they are not. The issue is whether the Department could reasonably have been expected to know that those non-expatriates were being invited to invest in Barlow Clowes in the way that subsequently transpired. In the passage of my statement on the advertising that took place and the way that that was done, I think that I have shown why, in my judgment, the Department could not reasonably have been expected to know.
On the question of facts and civil servants, I should tell the House that the permanent secretary at the Department —it is a matter for him to investigate rather then for Ministers—has considered whether the facts set out in Sir Godfray's report give rise to a case for disciplinary action, and has decided that they do not.

Mr. David Steel: Are Ministers in the Department satisfied that the people in the Department who are having to deal with these sharks and the rumours and speculation—to use his own phrase—which were drawn to the Department's attention, have sufficient expertise and qualifications to do so?
Secondly, the Minister tells us that the Government are advised that there is no legal liability, but does he agree that a particular feature of this tragic collapse is that many of the thousands of investors were elderly people, such as my own constituents, who put all their redundancy pay


into the fund believing that they were buying British Government securities with the DTI's stamp of approval? In those circumstances, is there not a moral liability?

Mr. Newton: It is precisely because we had doubts about the overall adequacy of the previous regulatory system that such an immense amount of effort went into producing the Financial Services Act 1986 and to bringing it into effect. An important part of that Act is to improve the regulatory system by bringing to bear on it the expertise of those who really are involved in the field. Hence, the establishment of the Securities and Investments Board, and, of course, FIMBRA, regulating the sort of people about whom we are talking in important respects of the statement.
I have made the position on legal liability clear. I have also made it clear that the Government have considered the issue of compensation on other grounds but arrived at the conclusion that I gave in my statement.

Several Hon. Members: rose——

Mr. Speaker: Order. There can be hardly an hon. Member whose constituents are not involved in this, including my own. May I ask those hon. Members who are called not to repeat questions that have already been asked and, furthermore, to ask single questions rather than a range of questions?

Mr. Michael Grylls: Does my right hon. Friend agree that those who press for compensation to be paid by the Government should bear in mind that compensation will come from taxes paid by all taxpayers and we should be cautious before we go down that route? However, is it surely not right that there should be a thorough investigation into the role of the financial intermediaries who made such rash recommendations, and, perhaps, the auditors, who should have known what was going on in Barlow Clowes throughout?

Mr. Newton: I obviously acknowledge my hon. Friend's first point. Whether it would be right to ask taxpayers to compensate is an issue to which the Government gave close consideration. I hope that my hon. Friend and the House will realise that in making the statement I labour under the difficulty, among others, that further action of various kinds may well arise from the facts revealed by the case. The point that my hon. Friend has in mind is perhaps best covered in the statement by my having said that my right hon. and noble Friend the Secretary of State has referred the report to the Institute of Chartered Accountants in England and Wales and to other regulatory bodies. I think that my hon. Friend will understand that I cannot go much beyond that, but I am sure that his point will have occurred to others.

Mr. Robert Sheldon: Is not the point encapsulated by one of my constituents who, at the age of 50, put all his redundancy money into Barlow Clowes, having gone to an intermediary, been informed that this was Government gilt-edged, that the company had its certificate and that its certificate had been renewed? Is not there clearly some sort of duty upon the Department to make some sort of compensation to such people?

Mr. Newton: I agree entirely with the right hon. Gentleman that the problem is encapsulated in the case

that he has set out. However, I am afraid that I cannot agree that on the basis of the account of the Department's actions within the legislative framework—I am sorry to have to emphasise this again—that existed at the time the Department's behaviour gives rise to a case for asking taxpayers to fund a compensation scheme.

Mr. Nicholas Winterton: I warmly welcome the factual content of my right hon. Friend's statement, but does he accept that many hon. Members find his conclusions completely unjustifiable and con-fused? How is it that the Department granted a licence to a group of companies about which it had been warned by me, among other hon. Members, and when clearly, before granting the licence, there was inadequate monitoring, incompetent accountancy advice and inadequate auditing? Despite all that, the Department still gave the licence. Is it not correct to say that this was not an official decision but a political decision because the Department knew that something was wrong with the company and if it did not grant the licence some people would lose, whereas if it did grant the licence people might come out of it all right? Was not it a gamble—a gamble that went wrong for which the Government should accept liability?

Mr. Newton: I can readily accept, because it is made clear in the report, that at certain points in time decisions were put to and taken by Ministers, not by officials, which is entirely right. That is not at all the same as saying that they were political decisions in the sense that my hon. Friend rather implied in his remarks. They were decisions made in good faith on the basis of the information available and applying a necessary judgment about the balance of advantage and disadvantage, including to investors in general, arising from different courses of action. I have explained why judgments were made which led to the decisions that were taken at the time. I hope that my hon. Friend will study the report with care, which I recognise he has not yet had time to do, before continuing with suggestions of the kind that he made in his question.

Mr. Alfred Morris: Is the Minister aware that it was the case of my constituent, Mr. Leslie Mullard, aged 75, and his wife, who have lost £65,000, which went to the ombudsman as a test case, and of the reply to me from the ombudsman of 8 July? If the Government are not prepared to offer compensation, will they at least give a plain assurance in the House today that they will abide by any recommendation for compensation which may be made by Sir Anthony Barrowclough? What does the Minister say about the remark of the right hon. Member for Chingford (Mr. Tebbit) that he was minded to refuse the licence? How could the offshore fund have existed without the licence for the onshore fund?

Mr. Newton: I was of course aware, because it had been reported in the press, although I am not sure that it has been confirmed by the Parliamentary Commissioner, that the right hon. Gentleman had referred a case to the Parliamentary Commissioner. I have no doubt that a number of other cases have been referred to him as well. I made it clear in my statement, and I readily reiterate it, that the Government will co-operate, as they rightly should, and that they will consider with great care any report that the ombudsman may make. Beyond that, I am not prepared to engage in speculation about the


hypothetical conclusions of a report that we do not yet know is going to be written without any opportunity to consider what it says.

Mr. Norman Tebbit: I remind my right hon. Friend, and I ask him to make it plain, that although I was not at the Department at the time that the licence was granted and that although it was reported in the press —and no doubt it will be dealt with in the report of the inquiry—a document during my time at the Department said that I was minded not to grant a licence. As anybody who has been in Government will know—I realise that few of those who sit on the Opposition Benches have been in Government——

Hon. Members: Is it in your book?

Mr. Speaker: Order.

Mr. Tebbit: As anybody who has been in Government will know, such an expression is a commonplace expression in correspondence, whether a Secretary of State has or has not minded himself to grant a licence. [AN HON. MEMBER: "Wriggling."] The hon. Gentleman says that I am wriggling. I think that he has forgotten that the correspondence said that I was minded not to grant a licence. What I am making plain is that I cannot take credit for having made a decision not to grant.

Mr. Newton: I think that I would simply like to thank my right hon. Friend for his observations.

Dr. David Owen: Popular capitalism, which this Government and many hon. Members support, surely depends on trust in institutions. How can we trust an institution, in this case the Department of Trade and Industry, when we know that the Bank of England and the stock exchange raised very serious questions? Can the right hon. Gentleman really come to the House and say that, given the background to these events, its actions were careful, considered and reasonable? Is it not time for this House, as an institution of Government, now to demand ex gratia payments for these small investors?

Mr. Newton: I hope that the right hon. Gentleman will —as I am sure he will—read, in the case of the Bank of England in particular, the text of the letter that it wrote, which is contained in the report. The suggestion in that letter on which I think his comments rely is of the form that "it occurs" to the writer that something may be the case. I think that the right hon. Gentleman will accept that that is not a basis on which a Department could launch action that would precipitate the collapse of a company or, in this case, a partnership. As for the stock exchange, my statement made it absolutely clear that once the concern began to have some flesh put on it, which was only at a relatively late stage, the Department not only took it seriously but set in hand the action that ultimately brought about the winding up of the company.

Mr. Stephen Day: Is the Minister aware that over 400 investors in my constituency have been affected and is he also aware that the majority of these people are not City whizz-kids? They put their life savings into Barlow Clowes largely because of the guarantee that they thought they had of a DTI licence. Will the Minister comment on the fact that if the Financial Services Act 1986 had been fully in operation when Barlow Clowes

collapsed, many of these investors would probably have been protected by the fund that was established under the provisions of that Act? As the Government recognise the principle and the need for such funds to be available in those circumstances, will they not accept that principle and do something about it, not because they are legally required to do so but because they have a moral duty to help people who are now in extremely dire circumstances?

Mr. Newton: It is certainly the case that, had the full framework of the Financial Services Act been in place, the position would have been a great deal better than under the legislation as it existed at the time. I cannot quite endorse the precise proposition that my hon. Friend has put to me. It would have depended on whether or not this or any other firm was duly authorised under the Financial Services Act. In the light of v/hat we now know, it appears to be highly unlikely that that would have been the ease, but what is very clear indeed is that the new legislation —the improved regulatory system—should make it very much less likely—even though, in the nature of things, it cannot make it totally impossible—that events of this very unhappy kind for my hon. Friend's constituents and others will occur again.

Mr. Brian Sedgemore: Is it a fair summary of the Minister's 17-minute statement that for a long time members of the DTI knew that Barlow Clowes were criminals but could not prove it and that when they could prove it and had the option of prosecuting or granting a licence they chose to grant a licence? Is that the acceptable or the unacceptable face of Thatcherism?

Mr. Newton: The short answer to the hon. Gentleman's question is that that is not true. When he has had a chance to read the report I think that he will recognise that that is not true.

Mr. Anthony Nelson: Is my right hon. Friend aware that his very full and detailed statement will be studied with care not only by Barlow Clowes shareholders and investors but by investors throughout the country in many other concerns? I put it to my right hon. Friend that the lesson to come out of this is that we should not wait for the horse to bolt before we close the stable door. Whether it is the Department of Trade and Industry or the Securities and Investments Board, I think that investing members of the public would like to feel that at an earlier stage of the proceedings the whistle was blown on fraudsters and rip-off merchants such as this. When this matter was discussed in the House during the passage of the Financial Services Bill, hon. Members on both sides of the House argued the case for the Securities and Investments Board to be able to play a much more incisive and investigative role in these matters, but that argument was resisted by the Government who said, "We are too afraid of a more powerful body overseeing the City." I believe, as do many other people, that the time has come for a rethink.

Mr. Newton: First, I agree with my hon. Friend that there is material in this report and in the sequence of events for large numbers of people to study. I hope that the report will be studied by many intermediaries and by all those who are concerned with the regulatory system. Secondly, if my hon. Friend is suggesting that we waited for the horse to bolt before we shut the stable door, may I make the


simple point that this Government, after decades during which no previous Government had tackled this problem, set up the Gower committee on investor protection in 1981 and introduced new regulations under the existing legislation in 1983. The Government have now produced a comprehensive framework. Far from waiting until the horse had bolted, we have got on with the job and a new framework is now in place.

Mr. James Lamond: When the Minister remembers that many thousands of small investors have lost at least a quarter of their capital, some of them perhaps 75 per cent. of it, together with the income that they derived from it, and when he recalls the crocodile tears that have been wept over the years, by the Prime Minister in particular, over the erosion of old people's capital by inflation, and also the very substantial "lifeboat" that was launched in the past to assist the banks who got into trouble, does it not smack a little of hypocrisy for him now to speak of protecting taxpayers' money in order not to compensate the small savers who have lost their savings?

Mr. Newton: The hon. Gentleman will, I hope, recall from my statement that I made it clear that we considered very carefully—I mean that—whether it would be proper to compensate for just the sort of reason that he has outlined. We came to the conclusion that, on the basis of the facts set out in Sir Godfray's report, we could not properly do that.

Sir Peter Emery: My right hon. Friend will recognise the concern felt on both sides of the House, which is justified, but we must not reach a judgment until people have had time to study the report. Sir Godfray was asked:
to investigate … with particular reference to … the monitoring of the activities of the licence holder.
We have not heard anything from my right hon. Friend about the activities of the licence holder, which many of us believe were extremely dubious. If he conducted his business in a doubtful way, ought that fact not to be made clear from the Dispatch Box? If it is believed from the report that there are liabilities attaching to the auditors and to the financial advisers, can the Government bring together those who are liable—many of whom are insured, so the insurance factor will deal with the liability—so that we can finalise the matter quickly and not have it drag through the courts for years and years?

Mr. Newton: I note my hon. Friend's latter suggestion. I hope that people will read this extremely comprehensive report thoroughly. With regard to monitoring, my hon. Friend will realise that he is taking me back to the ground, over which I skated delicately some questions ago, concerning possible issues of liability in various directions arising from the report. My hon. Friend will realise that I cannot speculate or comment further on that, having made it clear that the report has gone to the relevant regulatory bodies.

Mr. Jack Ashley: The Minister has given us his interpretation of the facts and mentioned a possible reference to the ombudsman. May I suggest that he goes much further and assures the House that, if the ombudsman finds a different interpretation of the facts

and also finds maladministration, there should be full compensation? If he does not, the right hon. Gentleman is saying that the Government will accept the ombudsman's findings only when they suit them.

Mr. Newton: I do not think that I have implied any such thing. I have said very clearly that we shall consider carefully any report which the Parliamentary Commissioner produces. I repeat what I said to the right hon. Member for Manchester, Wythenshawe (Mr. Morris) —I am not prepared to engage in speculation about hypothetical reports before we have had a chance to study them.

Mr. David Howell: We shall obviously have to examine the report in great detail and not rush to instant judgments. Is my right hon. Friend aware that he does not sound quite right, and nor, from what he says, does the Le Quesne report, when he makes such a clear distinction between the Barlow Clowes UK portfolios and its Gibraltar portfolios? Is he aware that some investors had their funds switched between the two, often without their knowledge, and that there was not the clear distinction that seems to be implied in the report? Will my right hon. Friend take that into account? My right hon. Friend is aware that the reference to the ombudsman will take several months, so will he not rule out the idea of temporary support and help for real hardship cases while this affair drags on?

Mr. Newton: With regard to the latter part of my right hon. Friend's question, I cannot add to what I have already said about the compensation issue as a whole. Of course I accept—it is clear with hindsight—that funds were switched from one portfolio to another and that a number of things that happened should not have happened. The issue that Ministers have had to consider is whether the Department, exercising its regulatory functions, could reasonably have been expected to know that that was happening when it was happening. That is the point to which my comments were directed.

Several Hon. Members: rose——

Mr. Speaker: Order. I appreciate the House's anxiety about this matter but I have to balance it against today's business. There was great distress among hon. Members last night who were unable to speak in the debate on the Defence Estimates. I shall therefore allow questions on the statement to run for a further 10 minutes when we shall move on to business questions. I shall endeavour to ensure that hon. Members who cannot be called to ask a question on this statement will be called then.

Mr. Joseph Ashton: Is the Minister saying that his Department monitored only sample advertisements in the financial press? Was it unaware of massive advertising in trade union magazines and others aimed at professional and managerial people nearing retirement or taking large lump sums on redundancy? Was no check made on those advertisements to establish how many people might be caught?

Mr. Newton: I think that I made it clear in my statement that the Department's monitoring rested on sampling the national and financial press. Some of the advertising to which the hon. Gentleman refers was not covered by that sampling system. I am advised that there are about 8,500 periodicals and publications in Britain which carry heaven


knows how many advertisements. I think that the hon. Gentleman will understand that monitoring each and every advertisement in each and every publication would be a task on a scale which would present great difficulties.

Mr. Ian Gow: Is it really the Government's view that no fair-minded person reading Sir Godfray's report could believe that any blame, let alone any negligence, attaches to my right hon. Friend's Department? If the Parliamentary Commissioner should decide to investigate a complaint of maladministration against his Department, is there any information over and above that already provided by his Department to Sir Godfray which could be provided to the Parliamentary Commissioner?

Mr. Newton: I am certainly not aware of any additional information which the Department could make available because—I hope I need hardly say it—the Department has made available to Sir Godfray for his inquiry all the information and papers that it has on this subject. That is not to say that nothing further could conceivably emerge from other quarters. We have co-operated with Sir Godfray in good faith, just as we shall co-operate with the Parliamentary Commissioner for Administration if he decides to investigate.
The report sets out a set of facts on which, necessarily, a judgment has to be made. As I have said to one or two hon. Members on both sides of the House, it is obviously possible for judgments to differ, but I have given the Government's judgment on these facts.

Mr. Harry Ewing: Is the right hon. Gentleman aware that I have a great deal of sympathy for him as he has been landed with this problem although he had no ministerial responsibility during the course of events which led to his statement?
It is extremely important that the right hon. Gentleman should take up the point made by hon. Member for Croydon, South (Sir W. Clark) about civil servants in the Department, and the announcement from the Dispatch Box that the permanent secretary is examining whether civil servants should be moved or removed. Is he aware that it is highly undesirable for Ministers to come to the Dispatch Box and make such statements about civil servants? If heads are to roll, they ought not to be civil servants' heads but ministerial heads.

Mr. Newton: I thank the hon. Gentleman for his initial comments but, to judge from the rest of his question, I think that he may have misunderstood what I said. I was asked about the position of civil servants. I made it clear that that is a matter ultimately for the Head of the Civil Service, but in the first instance it is one for the permanent secretary to the Department of Trade and Industry. I said what conclusion the permanent secretary to the DTI had come to.

Sir Peter Hordern: Will my right hon. Friend confirm that in the face of warnings from the Bank of England and the stock exchange his Department issued a licence in 1987, and that it did so on the balance of advantage, to avoid turmoil? What is the position of those investors who would have been saved had the Department taken action in 1987 and refused a licence, but many of whom invested their life savings thereafter? Does my right hon. Friend really feel that no moral responsibility attaches to the Government in that case?

Mr. Newton: My hon. Friend has rightly made a point that came up on numerous occasions in my statement and during the questions on it. Any decision on these matters had to be made on the basis of a balance of considerations and the consequences that would flow from alternative action. I hope that he will weigh the possibility at least —perhaps even more—that had Ministers made a different decision at the time we should be debating not his point about those who invested subsequently but instead the plight of those who had suffered from a disorderly collapse of the kind that I outlined earlier.

Mr. D. N. Campbell-Savours: Is not the real reason why the Government do not want to pay compensation that the matter has implications for investors in Investor Discount Brokerage, Afcor Investments and Harvard Securities, all of which have closed down over the past 12 months? In each case, investors allege—and have sent evidence to the Department—that Department inspectors had refused to act when they clearly should have acted to protect investors' interests.

Mr. Newton: No, I do not accept that interpretation in any way. As I said in my statement, the Government have carefully considered the case for compensation against the background of the facts revealed in Sir Godfray's report and decided that against that background it was not possible for us to conclude that taxpayers should be asked to fund compensation.

Mr. David Shaw: Does my right hon. Friend accept that, from the point of view of anyone with experience of the investment industry, there is no question but that his Department acted in accordance with the correct and proper procedures, from all that he has said? However, the real issue surely is that the blame must lie substantially with the firms of accountants and solicitors that gave false assurances to his Department. I note that he did not say that he was referring the report to the Law Society, and I trust that he will assure us that he is. He must surely accept that the real question is not where the blame lies but how quickly old-age pensioners—the elderly investors who might die before they can get their money back—will receive compensation. Will my right hon. Friend look at the legal procedures and all the problems that those investors will face in getting quick compensation?

Mr. Newton: I referred in my statement to the estimates that we have been given by the liquidators in respect of this country and Gibraltar, both of the current position and of the timing of any payments to investors. In particular, the liquidator of the United Kingdom operation hopes to make an interim distribution before Christmas. I hope that that will be some encouragement to my hon. Friend. We shall certainly do anything that we can to ensure that the process is completed as soon as possible.
On my hon. Friend's first point, I refer him to what I said earlier in these exchanges about the position of the various advisers involved. I have no doubt that the Law Society will have its attention drawn to his remarks.

Mr. Bill Michie: The Minister has outlined the long period of fiddling by Barlow Clowes and the dithering of the Department of Trade and Industry but then said to the House that there would be no compensation for those affected by this illegal action. On


behalf of those of my constituents who have written to me, I must ask how the Minister and the Government can justify allowing £1,000 expenses a week for Clowes when some of the victims are now having to manage on social security.

Mr. Newton: I can certainly give the hon. Gentleman an undertaking that we shall do everything in our power to encourage the liquidator—the decisions in these matters are his—to ensure that the expenses are kept to a minimum. I do not accept the hon. Gentleman's description of the Department's handling of the matter, which was a very difficult matter involving complex issues. As I have said repeatedly, the matter involved courses of action all of which were bound to have some disadvantages. I believe that reasonable judgments were made at the time against the background of the information available at the time and in the context of the legal powers available at the time.

Mr. Tim Smith: Could my right hon. Friend do a little more than take note of the suggestion made by my hon. Friend the Member for Honiton (Sir P. Emery)? Given that people who have just lost all their life savings are not the best placed to take legal action, and that the Department relied heavily on assurances given by Spicer and Pegler and Herbert Smith, could he not get together some of the professional advisers to decide whether there should be some sort of out of court settlement?

Mr. Newton: I note that that suggestion has been made for a second time. However, in the circumstances and for reasons that my hon. Friend will understand against the background of my remarks, I do not think that I want to go further on the role of the various special advisers involved.

Mr. George Foulkes: After the Minister's long statement and all the answers that he has given I am still not clear how to advise my constituents who invested in Barlow Clowes and felt safe to do so because the DTI had given the company a

licence in 1985. Will the Minister amplify what he said in reply to my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris)? Is some kind of compensation one of the options that he will eventually consider when he gets the ombudsman's report or should my constituents and all the other investors now abandon hope of any compensation and realise that they have been abandoned by the Government?

Mr. Newton: I should make clear what I said in my statement about the current expectations of the liquidators concerning the amount that will be returned to investors. As I suggested, in the case of the United Kingdom operation in particular, that amount is expected to be really quite substantial. I am sorry, but beyond that I cannot add to what I have already said about the Parliamentary Commissioner and the report that he may possibly produce.

Mr. Alastair Goodlad: Does my right hon. Friend accept that the sorry sequence of events that he has recited will give no comfort to the unfortunate victims of the affair, who may have hoped for compensation from his Department, for which there are clearly no grounds whatever, or for ex gratia payment, for which there are clearly no grounds whatever——

Mr. Robin Maxwell-Hyslop: There are excellent grounds.

Mr. Goodlad: —but that in what my right hon. Friend has said about the position of the solicitors, accountants and intermediaries of all sorts there are grounds for hope? More generally, does my right hon. Friend accept that in the regime following the enactment of the Financial Services Act 1986 events such as these could not be repeated?

Mr. Newton: I am grateful to my hon. Friend for the first part of his remarks. I should perhaps make it clear that I have not—in the sense in which he implied—said anything about the accountants or the solicitors. I have also made it clear that there are issues which will need to be—and which no doubt will be—considered by the relevant regulatory bodies.
I note my hon. Friend's last point.

Business of the House

The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): With permission, Mr. Speaker, I should like to make a statement about the business for next week:
MONDAY 24 OCTOBER—Consideration in Committee of the European Communities (Finance) Bill.
Motion relating to the Local Government (Prescribed Expenditure) (Amendment) (No. 2) Regulations.
TUESDAY 25 OCTOBER—Opposition Day. There will be a debate on an Opposition motion entitled "The State of the Econony".
Second Reading of the Road Traffic Bill [Lords], the Road Traffic (Consequential Provisions) Bill [Lords], and the Road Traffic Offenders Bill [Lords], which are consolidation measures.
WEDNESDAY 26 OCTOBER—Consideration of Lords amendments to the Housing (Scotland) Bill.
Motions relating to Scottish community charge regulations. Details will be given in the Official Report.
THURSDAY 27 OCTOBER—Remaining stages of the European Communities (Finance) Bill.
Motion on the Housing (Northern Ireland) Order.
FRIDAY 28 OCTOBER—There will be a debate on the disposal of radioactive waste on a motion for the Adjournment of the House. The Environment Committee's first report Session 1985–86 on radioactive waste (HC 191) and the Government's second stage response (Cmnd. 9852) will be relevant to the debate.
MONDAY 31 OCTOBER—Second Reading of the Rate Support Grants Bill.
The House will wish to know that it is proposed that Government business will be taken in the week beginning 14 November. The new Session will open on Tuesday 22 November.
[Debate on Wednesday 26 October 1988: Abolition of Domestic Rates (Domestic and Part Residential Subjects) (Scotland) Regulations 1988; Community Water Charges (Scotland) Regulations 1988; Community Charges (Registration) (Scotland) (No. 2) Regulations 1988; Standard and Collective Community Charges (Scotland) Amendment Regulations 1988; Personal Community Charge (Exemption for the Mentally Impaired) (Scotland) Regulations 1988; Community Charges (Registration) (Scotland) (No. 2) Amendment Regulations 1988.]

Mr. Frank Dobson: I thank the right hon. Gentleman for his statement, and, in particular, for the Opposition day set down for next week. In view of the fact that the parliamentary year is scheduled to last no fewer than 18 months on this occasion, will he tell us whether we shall have an Opposition day every week during the spillover period to go some way towards compensating for and matching the enormous extension of time made available for Government business?
In view of the widespread concern over today's statement about Barlow Clowes, and the number of hon. Members who wished to ask questions after the statement and did not get in, can we expect an early debate on the matter?
In view of the Prime Minister's recent much-vaunted conversion to protecting the environment, can we expect

an early debate on that subject in Government time, or will her conversion prove to be about as authentic as the Turin shroud?
Does the right hon. Gentleman recall that he has still failed in his duty to the people of Scotland in not getting enough Tories to serve on the Select Committee on Scottish Affairs? When can we expect the promised debate on his failure to set up that Select Committee?
Finally, in view of the growing crisis of homelessness, and the likely further increase in homelessness as many people cannot find the money to meet their mortgage repayments, can we expect a debate on homelessness and housing in Government time?

Mr. Wakeham: The hon. Gentleman asked me five questions on the business for next week. First, he asked me about an Opposition day. I recognise that it has been a long Session, and that we have already provided one extra day over that required by Standing Orders. I suggest that we discuss the question of additional time through the usual channels.
The hon. Gentleman raised the matter of Barlow Clowes and the report. I recognise that it is a very important matter, which the House will want an opportunity to discuss. I suggest that we spend the weekend reading the report, and perhaps have discussions through the usual channels to decide how best to proceed, as clearly many important issues have emerged from the exchanges that we have just had.
The hon. Gentleman's remarks about the Prime Minister and the environment are not really worthy of him, from his present position, but there will be a number of occasions when those issues will be debatable in the near future. I have no doubt that opportunities will be taken in the debate on the Queen's Speech, and so on.
With regard to Scotland, the hon. Gentleman, representing a London seat, seems continually to misrepresent the position. As he knows, proposals were put to the Opposition which were unacceptable to them. I regret that. I gave an undertaking that there would be a debate on it, and I shall honour that undertaking, but I consider that discussions through the usual channels will be the best way to proceed.
In regard to homelessness, I am conscious that a debate did not take place as intended, as a number of Opposition Members wished to raise an earlier matter at considerable length. That presents us with some difficulties. I think it is a matter best discussed through the usual channels.

Mr. Julian Amery: Would my right hon. Friend arrange for a general debate on Northern Ireland before the summit meeting between our Government and the Government of the Republic of Ireland to review the Anglo-Irish Agreement so that Her Majesty's Government will have the benefit of the views of the House on the matter?

Mr. Wakeham: I fully recognise my right hon. Friend's concern, and the force of his argument. I shall have to look into whether I can provide time, but of course there will be occasions when Northern Ireland issues can be raised. I shall look into the matter for my right hon. Friend.

Mr. Menzies Campbell: In view of events during the summer Olympic games, and certain remarks attributed to the Minister of State, Home Office since then, will the Leader of the House find an early date


for a debate on drugs in sport? When he is considering that, will he bear it in mind that 179 hon. Members, in the current Session, have signed an early-day motion supporting in principle the proposal that anabolic steroids should become controlled drugs under the Misuse of Drugs Act 1971?
[That this House notes with concern the evidence of mounting use of anabolic steroids by sportsmen and women which is recognised as having dangerous medical side-effects including the risk of death; is concerned that such drugs are freely available in the United Kingdom and are a source of temptation to naive competitors, unscrupulous coaches and over-ambitious parents; and expresses its support for the principle of making anabolic steroids controlled drugs under the Misuse of Drugs Act 1971.]

Mr. Wakeham: That is a suitable subject for debate. I cannot promise an early debate on it, but I shall certainly bear the hon. Gentleman's suggestion in mind.

Mr. Patrick Cormack: As my right hon. Friend and his ministerial colleagues are preparing for the Barlow Clowes debate, will they consider not just what Ministers and officials could reasonably be expected to know, but what investors could reasonably be entitled to think?

Mr. Wakeham: I do not think that I shall stray any further into the matter than my right hon. Friend the Chancellor of the Duchy did when speaking at the Dispatch Box a few moments ago. However, I shall certainly take note of my hon. Friend's point and draw it to his attention.

Mr. Dennis Skinner: When this debate on Barlow Clowes takes place, can we have a guarantee that by the time we have the debate the Secretary of State will have got the sack and been replaced by an elected Member who can carry the can? Will the Leader of the House ensure that the Chancellor of the Duchy does not take part in the debate, in view of the fact that it will not be lost on the British people that that Minister spent a lot of time at the Department of Health and Social Security when 138,000 people were arrested and tried under this Government——

Mr. Speaker: Order. Questions, not statements.

Mr. Skinner: I am just suggesting that we do not have that Minister in the debate, because the British people understand that if a Minister can be part and parcel of 138,000 people being arrested and convicted for fraud on the DHSS when the Government do not have the guts to deal with licences——

Mr. Speaker: Order. This is an abuse of business questions.

Mr. Wakeham: The hon. Gentleman's question is not much about next week's business, but I think that I can answer him. In a fairly uncertain situation, one thing is certain. As far as I know, my right hon. and noble Friend will still be Secretary of State when we have any debate on the matter, and almost certainly my right hon. Friend the Chacellor of the Duchy will reply to any debate in this House, and he will do it extremely well.

Mr. Michael Latham: Before we have a debate on Barlow Clowes, be it the week after next or whatever, will the Minister, whose statement today, frankly, was extremely disappointing and sounded too much like civil servants protecting their own backs, come to the Dispatch Box next week and announce what he will do about the specific suggestion made by two Conservative Members—that the affected interests should be called in to see if they can sort it out as the Minister is not prepared to do it himself?

Mr. Wakeham: I shall certainly pass that suggestion to my right hon. Friend, who has already taken note of it from the questions raised with him. I do not think I can add anything more at this stage.

Ms. Joan Walley: Does the Leader of the House have any proposals to bring forward a Bill for the removal of Crown immunity from the Palace of Westminster? In the light of the removal of asbestos from offices in the Tea Room corridors, will he make arrangements to report back to the House meetings he has had with Ministers at the Department of the Environment to make sure that hon. Members and their staff who are working in the Tea Room buildings can be sure that there are no asbestos fibres there, and, rather than depending on random sampling of asbestos, will he ensure that each office has been sampled so that the same safeguards apply that would apply to local authorities throughout the land?

Mr. Wakeham: There are two parts to the hon. Lady's question. First, on bringing forward legislation on the matter, I can assure the hon. Lady that at this stage in the Session, I am very anxious to get existing legislation through and I have no proposals to bring any further forward at this stage. Secondly, I recognise her concern and perhaps that of other hon. Members. I am looking into the matter, and I shall be in touch.

Sir Philip Goodhart: There has been considerable anxiety about the Government decision to repatriate 9,000 Vietnamese boat people who are now in Hong Kong. Can we have an early debate or a statement by the Foreign Secretary so that we can probe the assurances that have been given that those unfortunate people will not face punishment or starvation?

Mr. Wakeham: I recognise the concern expressed by my hon. Friend. It is an important matter. I cannot promise an early debate, but I know of occasions in the near future when such matters could be raised when the Foreign Secretary will be taking part in a debate in the House.

Mr. Alex Salmond: In considering the case for an early debate on the bid for Scottish and Newcastle Breweries by Elder IXL, will the Leader of the House take note of the unity of Scottish opinion on that matter across party boundaries? Will he take note of the fact that the Secretary of State for Trade and Industry has powers under the Industry Act 1975 to prevent, by prohibitive order, the transfer of control of important manufacturing concerns? Given the unity of Scottish opinion, is there not a substantial case for early action to end the uncertainty that should be tested in an early debate in the House?

Mr. Wakeham: As the hon. Gentleman knows, the proposed acquisition is being considered by the Director General of Fair Trading. He has a statutory duty to advise


my right hon. and noble Friend the Secretary of State. It would not be appropriate for me to say anything more at this stage.

Mr. Patrick McLoughlin: May I draw my right hon. Friend's attention to early-day motion 542 which deals with the appointment by Derbyshire county council of a former Labour Member of Parliament to the post of county director at £45,000 a year?
[That this House deplores the appointment by Derbyshire County Council of Mr. Reg Race, former hon. Member for Wood Green, former Research Officer for the National Union of Public Employees, former head of the Greater London Council's programme office, former consultant to the Association of Cinematograph, Television and Allied Technicians and former researcher to the Labour-funded London Government Information Unit, to the £46,000 a year post of County Director; and believes that all local authority employees should be politically impartial and that Derbyshire County Council is making appointments on the basis of whether or not candidates are acceptable to the ruling group 's left-wing views and not on the basis of merit and experience.]
Would it be possible to have a debate on the conduct of local government, bearing in mind that unsatisfactory appointment? The man has now resigned—[Interruption.] Well, he has resigned. The people of Derbyshire are wondering how much it cost to appoint him and how much has been spent on removal expenses for what has turned out to be an unsatisfactory nine-month political appointment. Is it not time for proper debates on the conduct of local government?

Mr. Wakeham: My hon. Friend has raised an important point. Effective local government rests solidly on the tradition of politically neutral officers, serving with equal commitment whichever party is in political control. There is increasing concern that in some cases appointments are politically motivated. The Widdicombe committee has put forward proposals aimed at preventing such abuses and the Government are considering them carefully.

Mr. Tony Banks: Is this a statement?

Mr. Wakeham: I have a note on every early-day motion on the Order Paper, and I propose to give the right answers.

Mr. Max Madden: In view of that interesting reply, will the Leader of the House arrange for Law Officers or Ministers in the Department of the Environment to make a statement tomorrow morning, hopefully having persuaded the Bradford Conservative council overnight to drop its plan to restrict public entry to next Tuesday's Bradford council meeting? Does the Leader of the House realise that many of my constituents and hon. Members will be denied access to that council meeting if the plan is allowed to be introduced?
Does he not realise that, however much Bradford Conservative council attempts to stop the public from witnessing its proceedings, it will not conceal the fact that it has no electoral mandate or popular support for the 9,000 redundancies and other deeply damaging policies it is hoping to steamroller through at next Tuesday's

meeting? Incidentally, it will be breaching a Bill which was sponsored by the Prime Minister soon after she was elected as the Member of Parliament for Finchley.

Mr. Wakeham: I know that this afternoon the hon. Gentleman has been in touch with officials at the Department of the Environment. Those are matters for the council, but I will ensure that the Minister for Local Government is aware of the hon. Gentleman's view.

Mr. Robin Maxwell-Hyslop: Will my right hon. Friend, without fail, arrange for the Chancellor of the Duchy of Lancaster to appear next week again at the Dispatch Box because his statement today was so inadequate and important questions remain unanswered? In his statement, will he address himself particularly to his Department's negligence, reported in paragraph 5.1 of the Le Quesne report, in which it is clear that the Department of Trade and Industry agreed to the two devices which enabled any fraud that took place to take place, namely electronic rather than written records and a system of obviating the necessity for issuing contract notes, without which any fraud would have been revealed before a lot of people had bought these securities?

Mr. Wakeham: I believe that my suggestion that we should all read the report over the weekend and then decide how best to proceed is the best suggestion I have for the House.

Mr. Jack Ashley: As the freezing of child benefit will have serious implications for the future of poor people and for the political future of the Secretary of State for Social Security, would it not be wise to debate that subject next week?

Mr. Wakeham: The wise course is to wait until the statement on such matters is made in the normal course of events.

Mr. Phillip Oppenheim: I wish to reinforce the request made by my hon. Friend the Member for Derbyshire, West (Mr. McLoughlin) for a debate on the recent sudden and surprising resignation of Reg Race, former Labour Member of Parliament, from his position as chief officer of Derbyshire county council. Will my right hon. Friend bear in mind that there is grave concern in Derbyshire that the resignation of Mr. Race is not unconnected to a large secret investment that the county council pension fund has made in a business operated by Owen Oyston, a former estate agent from Manchester? Will my right hon. Friend bear in mind the great concern in Derbyshire about that matter?

Mr. Wakeham: These are not matters for me, but I note what my hon. Friend has said.

Mr. David Clelland: Notwithstanding his previous answer on the subject, will the Leader of the House make arrangements for an early statement on the Government's position on the hostile takeover bid for Scottish and Newcastle Breweries, the Newcastle half of which is in my constituency? Is he aware that, although the people of Tyneside may be willing to accept Australian Neighbours, they are not willing to accept Australian Foster parents?

Mr. Wakeham: My right hon. and noble Friend the Secretary of State has a statutory duty in these matters, and it would not be right for me to comment while he is considering his duty.

Mr. Nicholas Budgen: Since the European Communities (Finance) Bill, with which the House will be dealing on Monday, envisages an 80 per cent. increase in European structural funds, a measure that will finance Euro-Socialism, will my right hon. Friend say, in view of the change in the Government's position as signalled by the Prime Minister's recent speeches about Europe, that the Government will be voting against that 80 per cent. increase?

Mr. Wakeham: The appropriate Minister will deal with the Bill on Monday when it comes before the House. However, I know that my right hon. Friend the Prime Minister fully supports the Bill, and I hope that my hon. Friend does as well.

Mr. Allan Roberts: Will the Leader of the House arrange for a statement to be made next week on the privatisation of Girobank? Will he ask the Minister to explain why the short list of those who have put in bids has not yet been announced, although it was promised that it would be announced during the recess? Will he ask the Minister to say whether there is any truth in the fact that the Bank of Scotland was on the short list and has withdrawn and that great difficulties are being experienced by the Government in their attempt to privatise Girobank?

Mr. Wakeham: I do not know whether that is correct. I do not believe it to be so. I shall refer the matter to my right hon. Friend the Minister, who I am sure will make a statement, if a statement is needed.

Sir Michael McNair-Wilson: Is my right hon. Friend aware that during the summer recess I had an opportunity to visit a unit at the Royal Berkshire hospital which is keeping premature babies alive? I was told that it is now possible to enable a 22-week-old baby to survive. In view of the grave implications of that, in terms of the Infant Life (Preservation) Act 1929, for medical teams which may be terminating pregnancies after that age, may I suggest that he should find time for the House to reach a final decision on the Abortion (Amendment) Bill introduced by the hon. Member for Liverpool, Mossley Hill (Mr. Alton)?

Mr. Wakeham: I recognise the concern, but I cannot add anything to what I have said before. Private Members' Bills are dealt with under procedures that the House has agreed. I cannot arbitrarily make a change in those arrangements.

Mr. Tony Banks: Will the Leader of the House arrange for a debate next week on the corrupt and incompetent policies being pursued by Tory-controlled Westminster city council, so that we can have an opportunity to discover more about the scandalous deal between Westminster city council and the Conservative party over the freehold sale of the office in Smith Square? It is clear that that cost Westminster ratepayers a great deal of money. If we are to talk about efficient local government, the activities of Westminster city council deserve much wider discussion.

Mr. Wakeham: The partial way in which the hon. Gentleman asked his question showed that he does not expect me to be very forthcoming in my answer. I cannot promise such a debate, but no doubt he can find a way of raising any points that he believes to be important.

Mr. John Browne: Does my right hon. Friend recall that, in his statement, our right hon. Friend used the word "exceptional" to describe the Barlow Clowes affair? Quite apart from any legal obligation that may or may not come from reading the report and further investigations, many Conservative Members feel that the Government have an exceptional moral responsibility. Would it be possible to make the proposed debate on Barlow Clowes a matter of urgency before the Government make further statements on proposals without having sensed the feelings of Conservative Members?

Mr. Wakeham: I still think that the advice that I have given to read the report over the weekend and consider how best to proceed is the right advice for the House.

Mr. Bob Cryer: May I suggest that the Leader of the House resurrects the Salmon commission's report on standards of conduct in public life? It would enable us to discuss the responsibility of the Secretary of State for Trade and Industry in the Barlow Clowes affair and why he has not resigned, as used to be the case when Ministers behaved in a crass and incompetent way. It would enable us to discuss the responsibilities of members of local government and the lord mayor of Bradford, who is using his casting vote in an unscrupulous and cheating way to maintain the Tories in office so that they can sack 9,000 employees, close 25 community centres and half a dozen benefit shops and make savage cuts elsewhere. Surely it is a matter of concern for the House that these massive cuts and attacks on the city of Bradford are being made in this unfair, cheating and gerrymandering way. We should discuss the matter, and the Salmon report contains the basis on which to do so.

Mr. Wakeham: I am sure that, when Lord Salmon wrote his report, he did not expect it to be used in the sort of question that the hon. Gentleman puts to me today.

Mr. Peter Thurnham: May we have an early debate on the need for legislation to deal with the dumping of toxic and other waste materials and for heavier fines to stop illegal dumping?

Mr. Wakeham: This is an important matter. I cannot promise a debate specifically on this subject, but, with a little skill, my hon. Friend might be able to make a point or two on Friday 28 October.

Mr. Ivor Stanbrook: Since my right hon. Friend says that he has a note on all motions on the Order Paper, will he say what progress has been made with the implementation by the Government of what is required under early-day motion 6?
[That this House deplores the fact that, alone among public service pensioners, those whose service was overseas cannot count pre-appointment war service towards their pensions; and calls upon Her Majesty's Government to remedy this injustice to a dwindling group of elderly people whose working lives were spent in adverse conditions while dedicated to the service of British interests overseas.]


It calls on the Government to end the anomaly whereby all public servans receive credit for war service unless that public service was abroad. Surely it is time for the Government to honour their implied moral obligations. Between the "court of Star Chamber", the Treasury and the Foreign Office, will he kindly ensure that this early-day motion is accepted and that the money is paid?

Mr. Wakeham: My hon. Friend raises early-day motion 6, and I shall tell him what my note says. My hon. Friend has had a long-standing interest in this matter and has raised it in the House on a number of occasions. We recognise how strongly the colonial service pensioners feel about the issue and we shall keep it under careful review. As my hon. Friend will appreciate, however, there are many claims on public expenditure resources.

Mr. Jonathan Sayeed: Does my right hon. Friend agree that it is a policy of enlightened self-interest that education be involved in business and business in education? If he agrees that that is the case, will he arrange for an early debate on the decision of Customs and Excise to charge VAT on gifts by business to universities?

Mr. Wakeham: I think that my hon. Friend is in luck. If he attends tomorrow and catches your eye, Mr. Speaker, this subject will be appropriate to the debate on education and industry links.

Mr. David Martin: Does my hon. Friend appreciate the strength of feeling about the inadequacy of the law and the state and practice of sentencing those who drink too much, get into a car, drive away and kill someone? May we have an early opportunity to debate the North report's proposals and hear the Government's conclusions on those proposals and, thereafter, have an early opportunity for legislation?

Mr. Wakeham: This is an important matter, and, as my hon. Friend probably knows, I have some responsibility for these matters. At present, we are considering the recommendations of the North report. When we have reached our conclusions we shall report to the House and decide how best to proceed from there.

Written Answers

Mr. Roy Hattersley: On a point of order, Mr. Speaker. Earlier this afternoon the Home Secretary and the Secretary of State for Northern Ireland distributed in the Press Gallery what purported to be written answers to parliamentary questions. Both concerned the future of the right to silence within the United Kingdom system of justice. One was not a written answer, for no question on the subject had been placed on the Order Paper. Both amounted, with varying degrees of ingenuity, to stratagems to avoid making a statement in the House. I do not wish to debate the merits—nor would you allow me to do so—of what the statements proposed, although it is important to my point of order to mention that until now the right to silence has been an essential aspect of our free society.
My point is simply that the prospect of a change to our legal system as fundamental as that should have been announced to the House in the proper and usual way. I therefore ask you, Mr. Speaker, first, what can be done to prevent the Government behaving in this hole-and-corner way and, secondly, whether we may have an explanation tomorrow from the Government about how something described as a parliamentary answer, which was not a parliamentary answer, was circulated in the Press Gallery, and what are the consequences of that mistake.

The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): I shall certainly look into the matter. As I understand it, two written answers have been made today by my right hon. Friend the Home Secretary and my right hon. Friend the Secretary of State for Northern Ireland that were perfectly in order.

Mr. Frank Dobson: No.

Mr. Wakeham: May I finish by saying that if I find that that is not the case I shall communicate it to you, Mr. Speaker.

Mr. Speaker: I have looked at one of the written answers. Written answer No. 249 says "pursuant to a reply on 20 July." I am not aware of the second written answer.

Mr. Kevin McNamara (Kingston-upon-Hull, North): Further to that point of order, Mr. Speaker. I appreciate that the Secretary of State for Northern Ireland had difficulties, but nevertheless he circularised a written answer without a question being put down, and the question was not headed "pursuant to" anything.

Mr. Speaker: If it was any fault of the Table Office, I shall look into the matter.

Mr. Hattersley: Perhaps I might help the Leader of the House through the dark passage of his ignorance. The question to which I referred was allegedly laid by the hon. Member for Nuneaton (Mr. Stevens). While he received an answer to his question, which was circularised, he did not ask a question.

Barlow Clowes Report (Copies)

Mr. Robin Maxwell-Hyslop: On a point of order, Mr. Speaker. I understand from the authorities of the House that there has developed a considerable laxity in Government Departments, who are omitting to lay on the Table of the House—which, for this purpose, means Journal Office—as soon as the House has passed a notice of motion for an unopposed return, the document concerned so that it is available to hon. Members. I understand the position to be that, although Ministers can control the time of release from Vote Office of documents which they are putting into Vote Office, from time out of mind it has been the rule of the House that when the House has passed a notice of motion for an unopposed return —as the House did at about 2.26 pm today—there should have been a copy of the Barlow Clowes report by Sir Godfray Le Quesne available to hon. Members in the Journal Office.
When I went to Journal Office to get it, it was only with some difficulty that the Clerk of the Journal was able to get a copy from Vote Office, who were under the impression that the embargo on release to hon. Members from Vote Office in some way covered Journal Office, which it does not. Would you, Mr. Speaker, therefore use such machinery as is appropriate to make it known—because I believe that it is a matter for you, Mr. Speaker, to make it known—to all Ministers that when they put such a motion on the Order Paper it is incumbent on them to ensure that there is a copy available to the Table of the House—which means the Journal Office in this context—right away and that that copy will not be delayed because, for their own reasons, they wish to delay delivery to hon. Members from Vote Office?

Mr. Speaker: The hon. Member raises an important matter. I shall certainly look into it.

Private Bills

Mr. Dennis Skinner: On a point of order, Mr. Speaker. You will recall that before July we had one or two discussions in the House about the propriety of the private Bill procedure as it affected the North Killingholme Cargo Terminal Bill and the Associated British Ports (No. 2) Bill and about whether Members with an interest could serve on the Committee. For instance, because the National Union of Mineworkers opposed the legislation, sponsored members of the union would hardly be likely to serve on the Committee.
It has been drawn to my attention that a former member of the private Bill Committee on the North Killingholme Cargo Terminal Bill, the hon. Member for Luton, South (Mr. Bright), has now become a PPS, so he has been taken off the Committee and a substitute found. This matter should be considered again because of the complications resulting from the appointment of the new Chairman.
Simon Engineering is the company that sponsors the North Killingholme Cargo Terminal Bill. That company's subsidiary, Simon Carves, is part of the British Chemical Engineering Contractors Association. The parliamentary

adviser to that association is none other than the Member who has replaced the hon. Member for Luton, South—the hon. Member for Rochford (Dr. Clark).
We must look into this matter. I suggest that the present Chairman should not be able to preside over this private Bill Committee. It would be better for all concerned if this murky private Bill procedure were abandoned, together with these two Bills, because of the complications which have arisen during the past six months.

Mr. Speaker: I think that that matter should correctly and properly be drawn to the attention of the Chairman of the Committee of Selection. That is what the hon. Member should do. We must now move on.

Mr. Frank Dobson: Surely, Mr. Speaker, an alleged breach of the Standing Orders applying to private Bills is a matter that is reasonably addressed to you. Members who become members of opposed private Bill Committees are required to sign a declaration saying that they have no personal or constituency interest in those matters. It is perfectly legitimate for my hon. Friend the Member for Bolsover (Mr. Skinner) to bring this point to your attention at the earliest opportunity, and that is what he did.

Mr. Speaker: I do not appoint Members to chair private Bill Committees. I shall look into the question of whether a declaration has been signed. I fully accept that this is an important matter.

Mr. Skinner: The reason for the urgency is simple. The private Bill Committee has been set up and will meet in the next few days. I suggest that the matter must be dealt with as soon as possible.

Mr. Speaker: So far as my responsibility is concerned, I give an undertaking that I shall look into the matter.

BILLS PRESENTED

RATE. SUPPORT GRANTS

Mr. Secretary Ridley, supported by Mr. Secretary Walker, Mr. John Major, Mr. John Selwyn Gummer and Mrs. Virginia Bottomley, presented a Bill to make further provision about rate support grants: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 216.]

HAEMOGLOBIN DISORDERS (SCREENTNG AND COUNSELLING)

Mr. Tony Lloyd, supported by Mr. Keith Vaz, Sir George Young, Mr. Bernie Grant, Mr. Dafydd Wigley, Mr. Paul Boateng, Mr. John Bowis and Mr. Peter Pike, presented a Bill to oblige health authorities in England and Wales and Health Boards in Scotland to provide screening and counselling services for people at risk from inherited haemoglobin disorders and to draw to the attention of those people and of medical practitioners and registered nurses the availability of such services: And the same was read the First time; and ordered to be read a Second time on 28 October and to be printed. [Bill 217.]

STATUTORY INSTRUMENTS, &c.

Ordered,
That the Liverpool and Wirral Urban Development Area Order 1988 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Wakeham.]

Orders of the Day — Defence Estimates

SECOND DAY'S DEBATE

Order read for resuming adjourned debate on amendment to Question [19 October]:
That this House approves the Statement on the Defence Estimates 1988 contained in Cm. 344.

Which amendment was, to leave out from "House" to the end of the Question and to add instead thereof:
believes that the plans outlined in the Statement on Defence Estimates, Cm. 344, and in particular the Government's acquisition of Trident which is neither British nor independent, are already having a deleterious effect on the conventional defences of the United Kingdom, especially the Royal Navy surface fleet, and on related defence procurement industries; calls upon the Government to cancel Trident and use resources to secure our non-nuclear defences and to work actively for the reduction and abolition of nuclear weapons in Britain and elsewhere and the adoption by the North Atlantic Treaty Organisation of a strategy of No First Use; applauds the signing of the Intermediate Nuclear Forces Treaty by the Governments of the United States and the Soviet Union and would be opposed to any nuclear arms deployment which would undermine the effectiveness of that Treaty; welcomes the progress being made towards a Chemical and Biological Weapons Ban Treaty, and the anticipated 50 per cent. cuts in ballistic missiles which would result from the Strategic Arms Reduction Talks; and further believes that the Conventional Stability Talks will provide the means whereby North Atlantic Treaty Organisation and Warsaw Pact troop numbers can be asymmetrically reduced, forward troop deployments can be withdrawn, and short-range ground and air launched dual capable systems can be eliminated."—[Mr. O'Neill]

Question again proposed, That the amendment be made.

Mr. Speaker: As this debate is starting later than we had expected, because of an important statement and business questions, I appeal to the Front Benchers to make brief contributions to give a lead.
I propose a limit of 10 minutes on speeches between 7 O'clock and 10 minutes to 9. I hope that that limit will be followed by all Members who are called, in view of the late start and the great demand to take part in the debate.

The Minister of State for the Armed Forces (Mr. Archie Hamilton): Although I have addressed the House as a Defence Minister before, this is the first time that I have done so without the right hon. Member for Llanelli (Mr. Davies) sitting on the Opposition Front Bench. I regret his resignation. He is an honourable man—too honourable, I suspect for today's Labour party. As he said on BBC 2's "Newsnight" programme on 17 June this year, three days after his resignation:
I felt it was going to be impossible for me. I would have been the person in the House of Commons who would have to draft the amendment to the defence White Paper. I would have found that difficult to do. I would have had to have stood at that Dispatch Box and argue the case. I think this year I would have found it impossible to do.
How many other members of the Labour party share the right hon. Gentleman's views on Labour's defence policy, but dare not speak out?
The amendment in the name of the Leader of the Opposition, which the right hon. Member for Llanelli did not draft, alleges that Trident is neither British nor independent. That is, of course, nonsense. Trident missiles

will be purchased from the United States, as indeed will other equipment for the submarine, and the British Government will control the operation of our strategic nuclear force. The critical factor is that a large proportion of our missiles will always be on our submarines ready for use and under the absolute control of the Government.
The hon. Member for Clackmannan (Mr. O'Neill) suggested yesterday that, with an 18-day period needed to service Trident in the United States, he hoped that the Soviet Union would give us three weeks' warning of a nuclear attack. That is also nonsense and I suspect that he knows that it is nonsense. Just in case he really wants to know what provision is being made to service Trident, let me tell him.
We regard the agreement to service Trident missiles at King's bay as very satisfactory. It will save some £770 million in capital costs as well as running costs. Of course Trident missiles will need to be returned to King's bay. but only once every seven to eight years. Our requirement is, and has always been, to maintain at least one submarine on deterrent patrol at any one time and I can assure the House that we shall have more than sufficient missiles to meet that requirement.

Mr. Martin J. O'Neill: I am grateful to the hon. Gentleman for giving us that information. Was there at any time the option of these missiles being serviced anywhere else, for example, on the Clyde at Coulport or Faslane?

Mr. Hamilton: As I have said, that option existed, but it would have cost us serious sums of money to set up those facilities here. Significant savings have been made by getting the servicing done at King's bay.

Mr. Tony Benn: Before the Minister leaves the point about the independent nature of the deterrent, will he tell the House plainly whether those missiles can be targeted without the use of the worldwide American satellite system? Sir Frank Cooper, former permanent secretary to the Ministry of Defence, made it clear in the Zircon film that there would be no capacity to target those missiles unless the American satellite system were switched on for that purpose.

Mr. Hamilton: The right hon. Gentleman knows quite well that we do not comment on the targeting of our missile systems.
I should like also to take the opportunity to make it clear that, although construction work at Vickers Shipbuilding and Engineering Ltd. on the two Vanguard class submarines so far ordered was suspended during the recent strike, we do not expect that there will be any slippage in the planned in-service date.
There were a number of interesting contributions in yesterday's debate. The hon. Member for Liverpool, Walton (Mr. Heffer) reminded the House how his family had been affected by Europe's two world wars. For the hon. Gentleman's family, and indeed for many other British families, those experiences were not unusual. The hon. Gentleman and I are united in our conviction that Europe must never witness another world war. Where we part company is on how that should be ensured.
The hon. Gentleman advocates a nuclear-free world, but does he not accept that the fear of a nuclear exchange has actually preserved peace in Europe? No one can afford to start a war that may end in massive nuclear destruction.
But remove the nuclear weapons and Europe becomes free for conventional war, and more likely to experience the third world war which we are all determined to prevent. In the debate yesterday, my right hon. Friend the Secretary of State described in some detail the extensive improvements that we are making to the armed forces. I should like to concentrate on the many different activities carried out by the services over the past year, in the United Kingdom, NATO, and in many other parts of the world.

Mr. Bob Cryer: If Polaris kept the peace, as the hon. Gentleman claims, why do we need Trident, which is between four and 10 times more powerful in its extermination capacity than Polaris? Why should we go to this expense when we have Polaris which, the hon. Gentleman claims, deters people from embarking on nuclear war? Why do we need Trident?

Mr. Hamilton: As the hon. Gentleman knows, Polaris is a relatively short-range missile system, and we cannot guarantee that it will remain undetected in the relatively shallow waters in which it has to operate. Therefore, we need a successor system which will operate much more widely.
Regular participation by United Kingdom forces in major NATO exercises not only helps to establish the sort of co-operation between allies that would be vital in war, but provides a visible demonstration of Alliance solidarity in peace. I should like to mention just a few of the many NATO exercises our forces have participated in during the year. The United Kingdom contingent of the allied command Europe mobile force, which represents some 25 per cent. of its total strength, took part in joint exercises in both Norway and Turkey. The 19,500-strong United Kingdom mobile force took part in September in a large NATO reinforcement exercise in Denmark.
At sea, a number of Royal Naval ships and submarines played their part in Teamwork 88, a major NATO maritime exercise which also involved RAF aircraft and some 5,200 Royal Marines. In the UK air defence region, RAF Jaguars, Buccaneers and Tornados were also involved in exercises Elder Forest and Elder Joust in April and earlier this month.
In Britain, a series of national exercises designed to test our current plans for military home defence has been taking place since 7 September, involving the Regular Army, elements of the Royal Navy and Royal Air Force, and members of the United States forces based in this country. They were joined by volunteers from the Territorial Army, the Home Service Force and by individual reservists.
I should like to take this opportunity to express my gratitude to all those employers who have released people to take part in these exercises. The importance of the reserve forces to our defence effort cannot be over-estimated, and it is vital that we keep these forces fully trained. I am also most grateful to those non-military organisations, including the police, fire and ambulance services, and the voluntary aid societies, who have found the time and resources to participate. Their contribution to the success of the exercises is very much appreciated.

Mr. Robert Key: Is my hon. Friend aware of how successful exercise Drake's Drum was? I was one of the hon. Members who were privileged to see that exercise

on Salisbury plain, and we were particularly struck by the way in which the home defence forces and the territorialists quickly knitted back into the regular military pattern. Is he also aware that any attempt to move the military from Salisbury plain to the north would be heavily resisted in my constituency? The Army is welcome to stay there for as long as it wishes. The local community is well aware of the great contribution that the military makes to conservation, of the environmental impact of the Army on the south of England, and of the role that the Army takes, for example, in preserving Stonehenge, with English Heritage. I hope that my hon. Friend will have something to say about that later.

Mr. Hamilton: I am grateful to my hon. Friend for his remarks, and I know that the Army will be particularly grateful that it is so welcome in his constituency.
The House will be aware that earlier this month the Soviet Union issued a challenge inspection request to the United Kingdom under the terms of the Stockholm document. We responded positively, and within the time limit laid down. The exercises taking place within the specified area were not included in the annual Stockholm calendar of notifiable military activities for 1988 since the troop levels in the field did not approach the 13,000 threshold for notification. The inspection lasted for 48 hours and was conducted in a professional and congenial spirit. No difficulties arose and we welcomed the opportunity to demonstrate our willingness to contribute further to such confidence-building measures.
Although our defence efforts are rightly concentrated in the NATO area, it is important not to forget our commitments and activities that lie in other parts of the world. The past year has been an important one for deployments and exercises by our forces outside the NATO area. Such deployments not only test the capabilities of our forces, but provide an excellent opportunity to renew professional links with our friends and allies throughout the world.
Even as I speak, ships of the Navy's Outback 88 task group deployment are preparing to return to the United Kingdom from the far east. The three warships and three Royal Fleet auxiliaries, headed by HMS Ark Royal, represented the Royal Navy at the fleet review in Sydney on 1 October as part of the Australian bicentennial celebrations. It was particularly appropriate, of course, that the 60-odd vessels in the review were led to their stations by HMS Sirius, the namesake of the Royal Navy ship that led the first fleet to Australia 200 years ago.
It is a matter of regret that the visit to Australia has been marred by the activities of trade unions in Melbourne which prevented HMS Ark Royal entering Melbourne harbour. As the House knows, we have a policy of neither confirming nor denying whether our ships are carrying nuclear weapons and we are not prepared to alter that policy to meet the demands of the Australian trade unions. I believe that many Australians in Melbourne were extremely disappointed not to have Ark Royal contributing to their 200th anniversary celebrations.
Earlier in their deployment, ships from Outback 88 were able to demonstrate the Government's firm commitment to the five power defence arrangements by joining our allies—Malaysia, Singapore, Australia and New Zealand—in two major exercises: the maritime exercise Starfish in the South China sea, and the impressive


air defence exercise Lima Bersatu. They also joined units from the Hong Kong garrison and the Sultan of Brunei's armed forces in exercise Setia Kawan, or "Loyal Friend".
The RAF also mounted an impressive overseas deployment to the far east during this, its 70th anniversary year. This deployment, nicknamed Golden Eagle, is still under way and involves four Tornado F-3 air defence aircraft, with tanker and Hercules support. The aircraft took part in exercise Lima Bersatu, and will return home via the USA, thereby completing a circumnavigation of the earth.
Sadly, there have been a number of natural disasters around the world this year. Where the services have been in a position to help, they have done so. In August, there was a severe earthquake in northern India and Nepal. The British military hospital at Dharan became the focal point of medical support for the local population, helped by emergency medical teams flown in from Hong Kong and the United Kingdom. The hospital was expanded from 70 to 250 beds and has been working non-stop over the past few weeks, treating several hundred casualties. This extra activity is now winding down, but it has been an outstanding example of the professionalism and skill of the armed forces.
In September, following the devastating passage of Hurricane Gilbert across the Caribbean, the West Indies guardship, HMS Active, sailed to the Cayman Islands and Jamaica to provide emergency relief assistance, and a team of Royal Engineers flew from Belize to Jamaica to help restore the Princess Margaret hospital, near Kingston, to working order.
Yesterday, my right hon. Friend the Secretary of State paid tribute to the efforts of the Royal Navy and the Armilla patrol. I shall mention in particular our mine countermeasure vessels. To date, they have discovered and destroyed 10 mines in the waters of the region. Without their efforts, ships might have been lost or seriously damaged, almost certainly with loss of life.
Western European Union partners have made a real contribution to maintaining the freedom of navigation in the Gulf and to upholding regional stability. Members have continued to co-ordinate closely over their assessments of the changing situation in the Gulf and about their plans for national naval contingents there. I am glad to inform the House that mine countermeasure vessels of Western European Union countries are currently checking a new merchant shipping route in the Gulf. This will be an important contribution to freedom and safety of navigation in those waters.
Another difficult but continuing task for our armed forces is, of course, in supporting the Royal Ulster Constabulary in the fight against terrorism in Northern Ireland. The Government are determined to carry through their efforts to restore peace and order to the Province, and all three services, including the Royal Marines, have a part to play in combating, within the rule of law, the men of violence whose aim is to destroy any hopes of peace or a normal life for the people of Northern Ireland.
The main responsibility for the military element of maintaining security in Northern Ireland rests with the Regular Army and the Ulster Defence Regiment. There are currently some 11,100 regular service personnel and some 6,300 Ulster Defence Regiment personnel in the Province.
I should like in particular to pay tribute to the Ulster Defence Regiment and the role which it plays in

supporting the RUC. Since its foundation just over 18 years ago, the UDR has been continually on operations —a unique record for a regiment of the British Army. During that time, the regiment has been transformed from its original role as a part-time local defence force. Today, nearly half of the soldiers in the regiment are full-time soldiers, carrying out almost exactly the same duties as the Regular Army, but with the benefit of local knowledge and considerable experience. In over 80 per cent. of the Province, the UDR now provides the primary military support to the RUC.
A few brief details will serve to illustrate the increasing professionalism and the continuing commitment of members of the UDR. First, in the past two years, all new UDR permanent cadre officers have completed the standard military course at Sandhurst, some of them, I may say, with distinction. Secondly, from a strength of some 6,300, nearly 1,000 members of the UDR have now served for 15 years or longer under the most dangerous and stressful conditions. Thirdly, nearly 30 per cent. of the permanent cadre have previous experience with other regiments of the Regular Army, and nearly 40 per cent. in the case of officers and senior NCOs. Finally, this year alone there have been 43 awards for gallant and meritorious service in Northern Ireland made to members of the UDR, including 19 mentions in dispatches.
I believe that these figures speak for themselves in showing how the UDR has developed into a highly motivated, professional and experienced regiment of the British Army. The military value and capability of the UDR is increasingly being recognised on both sides of the water, and I applaud the special efforts that the regiment has been making recently to win the support of the whole community of Northern Ireland, which it serves with such distinction. It is a matter of regret that some members of the Catholic community are reluctant to join and that they presently form only a small element of the regiment.
The past year has, however, seen an upsurge in brutal acts of terrorism. Inevitably, this has taken its toll of members of the security forces, as well as those they work so bravely to protect. So far this year, a Royal Navy recruiting officer, 21 members of the Regular Army and 11 members of the UDR have been murdered by terrorists in Northern Ireland. Outside the Province, one soldier died in a bomb attack on Mill Hill barracks in north London. Another was killed as he drove to catch a ferry home in Ostend and three RAF personnel were murdered while off duty in Holland.
Hon. Members will recall in particular the barbarous and shameful act on 20 August this year against a bus carrying 35 off-duty soldiers from 1st Battalion the Light Infantry returning from leave to their base in Omagh. The bomb killed eight soldiers and injured 27 others. I know that the House will support me in condemning this kind of cowardly attack against young men who have chosen to serve their country.
The House will be well aware of the review of security in Northern Ireland that has been carried out. I shall not comment further on that now.
Events such as these do not, however, weaken our resolve to defeat terrorism. The campaign against the men of violence in Northern Ireland continues and some notable successes have been achieved. A significant number of terrorists continue to be arrested and charged with serious offences.
Since the beginning of the year, the security forces have also recovered nearly 500 weapons from terrorists, the highest total since 1977, over 86,000 rounds of ammunition, the highest total since 1974, and over 6 tonnes of explosives have been found or neutralised. In addition, some 300 kg of the powerful military explosive Semtex has been recovered in the Republic by the Garda.
Despite the significant recoveries that have been made by the security forces on both sides of the border, the large quantities of arms and explosives that reached Ireland in the pre-Eksund shipments still pose a serious threat. By the end of September, for example, some 400 kg of Semtex had been used by terrorists to make 160 lethal or potentially lethal devices, which were either exploded by the terrorists or made safe by the Army.
Over the past year, a considerable number of planned terrorist attacks have been successfully thwarted. Just last month, for example, three armed terrorists were intercepted at Drumnakilly in the act of attempting to assassinate the driver of a coal lorry. Hon. Members will have noted that the Provisional IRA has admitted that the terrorists were on so-called active service when they were killed. I believe that that statement speaks for itself in demonstrating the viciousness of the current terrorist campaign. The incident also demonstrates the risks that the security forces face in Northern Ireland as they try to halt the terrorists' campaign of violence and murder. Many lives have undoubtedly been saved by the bravery, vigilance and dedicated hard work of the security forces.
This vigilance needs to be constant, though, and the hard work needs to be effective. To increase the effectiveness of our counter-terrorist operations in the border area, a new brigade was formed earlier this year, with special responsibility to improve the co-ordination and direction of security force activity along the border. It will also allow the other two brigades to concentrate on areas of high terrorist activity in the rest of the Province. We continue to build on the Anglo-Irish Agreement and on the improved crossborder co-operation with the Irish security forces, which is vital to our efforts to prevent the border being exploited by terrorists.
The most telling recent example of the Provisional IRA's utter callousness when it comes to the murder of innocent civilians was the plot to detonate a massive car bomb in Gibraltar in March. Had this attempt not been thwarted, it is possible that there would have been hundreds of civilian and military casualties. I welcome the clear and conclusive verdict of the Gibraltar jury, which was reached after an exhaustive public examination of all the relevant facts. I should also like to take this opportunity to pay tribute to our special forces. Because of their covert nature, very little is usually said about them. It is often forgotten that they are ordinary people with families and are no different from anyone else. They are, however, highly trained, they have to take great risks and, as a fighting force, they are the envy of the world.
In Gibraltar the SAS showed great courage and determination. They had a difficult task and they carried it out within the law. I have no hesitation in saying that they are a credit to the country and I join in my right hon. Friend the Prime Minister's recent tribute to their bravery in going back to Gibraltar to give evidence at the inquest.
I must say that the Government made it clear all along that the inquest was the proper place for a full examination of the events of 6 March and that prior "trial by television" was highly undesirable. The facts as they emerged at the inquest have amply demonstrated that the television programme "Death on the Rock" was manifestly flawed with significant inaccuracies, casting a shameful slur for a number of months on the reputations of the soldiers concerned. The timing of the programme was, moreover, unjustified and prejudicial to potential jury members. I therefore very much welcome Thames Television's inquiry under Lord Windlesham into the making of the programme.

Mr. Eric S. Heffer: I find what the Minister says very interesting in relation to the overall debate on defence expenditure, but, as he is pursuing this matter, has the Index on Censorship been drawn to his attention? Over the years, that journal has concentrated on analysing undemocratic regimes in Eastern Europe and other parts of the world, but one of its recent editions analysed the failure of the Government to protect human and democratic rights in this country. Is he aware that that is a new departure for the Index on Censorship and that, in this respect, this country has the worst record in the West? We are increasingly finding that the Government are taking away our democratic rights step by step. It is the duty and responsibility of our defence forces to uphold democracy and not to allow the Government to undermine it.

Mr. Hamilton: I should have thought it was clear to any hon. Member that the people who are trying to undermine democracy here are the terrorists and that we must do everything we can to oppose their dastardly acts.
The terrorist attacks on the continent over the past year have reinforced the need for vigilance. I can assure the House that the safety of service personnel, wherever they are, is of paramount importance to this Government, and that we are taking all reasonable steps within our power to protect them. Service men and women are given regular and timely briefings on the level of the terrorist threat, and particular emphasis is put on practical steps which individuals can take to minimise the risks to their safety.
Much wider initiatives are being implemented. As I announced on 23 August, we have decided that service personnel, their families and British civilians working with British forces Germany should now use British civilian number plates on their private cars, as they do in this country. Action is well in hand to carry out this change as soon as possible. About 95,000 vehicles are involved, and to get the maximum benefit from this initiative the numbers must be issued randomly, so the change will inevitably take time. We aim, however, to complete the greater part of the changeover before the Christmas leave period begins.

Mr. John Wilkinson (Ruislip-Northwood): I have corresponded with my hon. Friend on this issue. Would it not be wise for the Ministry to encourage service personnel in Germany to buy German cars and register them locally rather than to drive British cars with British number plates, albeit not service plates, which are readily identifiable?

Mr. Hamilton: I take my hon. Friend's point. Most of our service men in Germany want to buy their cars there


so that they can enjoy the tax advantage of that arrangement. They then bring them back to Britain. They are under threat anyway when their cars are in bases, and we are trying to protect them when they are on the open road or coming across the Channel on the ferries.

Mr. Frank Cook: Did the Ministry consider that the use of English number plates would identify service personnel as being fish in a different pond? Was it not considered possible to use United Nations plates, which would have allowed service personnel to enjoy tax concessions and an added degree of anonymity?

Mr. Hamilton: I am not sure whether the hon. Gentleman wishes to refer to United Nations plates or NATO plates. The use of NATO plates was an alternative that was considered, but it was thought that the IRA might decide to treat all members of NATO as targets. The cars bearing such plates would still have been identifiable when crossing the channel by ferry and on the open road away from British bases, with which we were mainly concerned.
Our primary defence commitment is, of course, NATO, and for that reason the actions of the Soviet Union are of the utmost importance. As my right hon. Friend the Secretary of State said yesterday, a fact that needs to be faced is that the recent Soviet rhetoric has yet to be matched by substantive action. It is therefore essential for us, and for NATO, to ensure that our conventional and nuclear forces are kept up to date.
People have now seen through the arguments of CND and those of the Opposition parties. The clear lesson of the INF treaty was that success in arms control comes from being able to negotiate from strength, not from weakness. This is not nuclearphilia, cold-war mongering or sabre rattling. NATO's nuclear stockpile in Europe has been reduced by about 35 per cent. since 1979 and now stands at its lowest level for over 20 years. There can be no clearer demonstration of our determination to maintain only the minimum forces necessary for effective deterrence.
Equally, however, those minimum forces must be effective and properly structured. Weapons that are seen to be outdated or ineffective simply serve no good purpose. Let there be no mistake, therefore. Now is not the time to drop our guard. The need to ensure that our defences are effective and up to date, as this Government have been doing for the past nine years, has not now gone away, even with such an important development as the INF treaty.

Mr. Tony Marlow: My hon. Friend has just said that weapons that are outdated serve no useful purpose. Are not we reaching the stage now whereby the development of anti-tank missiles and the development of helicopter technology will render the tank a lump of metal constrained within small areas of the battlefield, totally vulnerable and irrelevant to future defence needs? If the Government, quite rightly, are going to spend money on defence, should it not be spent on aerial defence through helicopters rather than on these blundering great antiquities?

Mr. Hamilton: I have been aware for some time that my hon. Friend takes a jaundiced view of the future of the tank. He held the view when I was last a defence Minister about 18 months ago. His views have been taken into consideration by all those who are in the place where I work, and their view is that the tank still has a useful future.

Mr. Edward Leigh: Will my hon. Friend give way?

Mr. Hamilton: No, I shall not give way. I must bring my remarks to an end. I have undertaken to make a short speech.
The Government's defence policy since 1979 has been clear and unequivocal. I wish I could say the same of the Opposition's policy. Yesterday, they tabled two amendments to the Government's motion. One, in the name of the Leader of the Opposition, set out what he would like Labour policy to be. The other, in the names of the hon. Member for Islington, North (Mr. Corbyn) and other Members generally reckoned to belong to the hard Left of the Labour party, represents what Labour policy as agreed at the Labour party conference actually is. As usual, the Labour party is split on defence.
Let us make no mistake about this. Whether we consider the policies of the soft Left or the hard Left, they are equally dangerous and damaging to the security of the United Kingdom. Labour's defence policy has played a key role in losing it two general elections, and it looks to me as if it will sink it in the next one, too.

Mr. Allan Rogers: First, I welcome the Minister's return to the Government Front Bench. I am sure that his recent stint as Parliamentary Private Secretary to the Prime Minister will fit him well for his post as Minister in charge of the SAS.
I join the Minister in the tributes that he has paid to our service men and women. They have played an important part in the defence of this country, and my right hon. and hon. Friends and I offer our gratitude and congratulations to all those whose professionalism and skill has contributed so much to the quality and image of our armed services. We have great regard for those who serve in Northern Ireland in most difficult circumstances. We heard last night from my hon. Friend the Member for Stockport, North (Mr. Cook) of the appalling conditions that some of our soldiers and service personnel generally have to endure, and I am sure that there may be ways of improving these conditions. I hope that the Secretary of State for Defence and the Minister will consider what my hon. Friend said and perhaps improve conditions.
We offer our condolences and sympathy to the families of those who have been killed over the past year in service for our country.
We understand that this year the Ministry of Defence begged for an extra £1·4 billion. That is money that the Secretary of State says is vital for our defence, but the claim has been turned down. We understand also that the hotel room, or bedroom, negotiations at Brighton have failed and that he has a somewhat smaller sum than that for which he argued. The right hon. Gentleman said yesterday that he was under severe financial constrictions and that he needed the additional money badly. Will he or the Minister let us know how he fared? Will one or other of them let us into the secret and tell us what the deal is so that we can comment on it? It would be interesting information. I am sure that the House would like to know the details of the deal.
The issue of Royal Ordnance sites was dealt with ably yesterday by my hon. Friends the Members for Clackmannan (Mr. O'Neill) and for Renfrew, West and Inverclyde (Mr. Graham). They posed critical questions,


none of which was dealt with either by the Secretary of State or his property adviser, the Under-Secretary of State for Defence Procurement. Perhaps the questions will be answered today. There is extreme concern about the aura of connivance, corruption and irregularity that is beginning to surround the issue. I can assure the Minister and Conservative Back Benchers that the problem will not go away. Yesterday, the Under-Secretary of State for Defence Procurement claimed that there are major offsetting costs in relation to the two sites that are being sold. I intervened to ask whether he could provide details of these costs and he replied that
it would be a waste of time to quantify the costs."—[Official Report, 19 October 1988; Vol. 138, c. 976.]
Why would it be a waste of time to quantify the costs? Will the Minister explain the reasoning behind that ludicrous statement? Surely the costs were important in assessing value or pricing when the Ministry of Defence was selling the Royal Ordnance sites. Are we to understand that Royal Ordnance was sold without an examination of both sides of the balance sheet? Why is it a waste of time to quantify these negative costs? Surely they should have been a vital factor in assessing what the asking price should be——

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Tim Sainsbury): The hon. Gentleman has only quoted one sentence of what I said last night. I reminded him then that, when trying to quantify costs, one has first to discover what costs are being quantified—what decontamination is required, what planning permission might be available, what development costs such as access roads and sewerage might be. Those things are not known; they are uncertain, and until they have been determined the costs cannot be quantified. All that we know for certain is that they are substantial.

Mr. Rogers: I have never heard so much codswallop in my life. Is the Minister suggesting that it is beyond his and his Department's wit to assess what the costs of access roads or of site development would be? Any developer who is going to develop land—whether previously developed or on a green field site—could come up with those costs. The Minister is merely illustrating his Department's incompetence in this matter.
The facts revealed in The Independent are as follows. There were two sites in the south-east, including the historic Enfield site. They were sold to British Aerospace on a valuation of £3·5 million, and are now worth £400 million. Representations were made by British Aerospace, in its desire to take over Royal Ordnance, to the effect that it would protect jobs. It has now reneged on that promise. These serious allegations strike at the heart of the Government's competence and integrity. They warrant a full and public inquiry. Will the Secretary of State or his Ministers now give the House an assurance that such a public inquiry will be held? I shall be happy to give way to them, should they want to do so. Their silence illustrates that they do not want an inquiry because of the incompetence that would be revealed—but the problem will not go away.
I also want the Minister to give us an assurance that he will co-operate fully with any Public Accounts Committee investigation into this matter. I see that he is nodding his assent, and I am glad of that. May we also have an

assurance from the Minister that none of his officials who were involved in the sale will be employed by British Aerospace when they leave the MOD? Such a thing is not unknown.
In his wind-up speech yesterday the Parliamentary Under-Secretary of State for Defence Procurement said that he sought to emulate Cato the Elder by using in every speech the phrase
Value for money must be obtained"—[Official Report, 19 October 1988; Vol. 138, c. 973.]
The British taxpayer wishes that, when he sells off Royal Ordnance—and other public assets—he would espouse not "value for money" but getting "money for value"—the value of British assets which are being given away.
I want to concentrate on the management aspects of defence and of the defence economy: procurement, competition in procurement, the Government's so-called efficiency drive and the so-called monetary savings that have accrued to them from it. Those things bear directly on the operations and capability of our forces.
Procurement decisions lie at the heart of defence matters and are an area of defence that the Government do not particularly like having discussed. When pressed on such issues they retreat during discussion of the vital points behind the barricades of security or commercial confidentiality. That is why it suits them for the Opposition to have differences over the pace of nuclear disarmament. It is understandable that they should make much of those differences—one would expect nothing else from them. No one is in politics to help other parties, especially not the Conservatives, whose ethic is one of helping themselves. Our differences suit them because they shroud their deficiencies. They shroud their cut-backs, their overruns, their delays and their bad management of the defence economy. They give them an escape route from their failures. Apart from the activities of the Opposition and of some newspapers such as The Independent, discussion of the scandal of procurement mistakes, fraud and irregularities is going by default.

Mr. Dick Douglas: I hesitate to interject but thank my hon. Friend for allowing me to do so. As a member of the Select Committee on Defence I may say that we produced a substantial report on procurement and enjoyed substantial co-operation. Indeed, we could not have produced it without the MOD's co-operation. So I cannot really see how differences in the Labour party help the MOD to hide anything to do with this matter. The MOD was forthcoming in its replies, which substantiated virtually everything that the Select Committee said.

Mr. Rogers: I thank my hon. Friend for his timely and helpful intervention.
While this might be excusable in some parties, it is surely not excusable in the Tory party, the party of big business. Conservatives pride themselves—we hear this every day—on being the shrewd, hard City slickers, the tough streetwise people who are capable of taking tough decisions. When the last Secretary of State for Defence was appointed, the then Minister of State said in a defence debate at the time that it was nice to have a Secretary of State who knew his way around the business world. Let us grant the Tories the fact that they are shrewd, hard City slickers, capable of taking tough decisions that affect nurses, hospitals, the sick and needy, and child benefit. But


when it comes to defence they fail lamentably to take the tough, hard decisions that are required for the defence of this country.
I want to speak briefly about the Governments spending proposals, and in doing so to pay tribute to the Select Committee on Defence for highlighting much of what was wrong about these Defence Estimates. The Government say there is no need for a defence review and that all commitments and roles will be maintained—the forward defence of West Germany, the protection of the east Atlantic, the defence of the United Kingdom home base, Northern Ireland, Polaris and Trident, out-of-area operations, the Falklands garrison and sea and air bridge. But many hon. Members on both sides now say that we cannot maintain these commitments and carry out these roles without an increase in expenditure. Yet expenditure is falling in real terms. On the Government's figures it will fall by more than 7 per cent. in real terms between 1986 and 1989.
The Government gave a commitment—carried on from a commitment made in May 1977 by the Labour Government, as was pointed out yesterday by my hon Friend the Member for Sheffield, Attercliffe (Mr. Duffy) —to 3 per cent. growth a year in real terms. In practice we know that that 3 per cent. growth has not taken place since the Falklands episode. Defence spending has fallen considerably in recent years, it is still falling and it will continue to fall. As table 1 of the Select Committee's report on the 1988 Estimates shows, in 1979 defence as a share of GDP was 4·5 per cent. In 1987–88 it was also 4·5 per cent., but in 1990–91 it will be only 4 per cent. There has been no extra effort or allocation made by the Government. In other words, defence is receiving a diminishing share of a larger cake.

Mr. Keith Mans: Does the hon. Member for Rhondda (Mr. Rogers) agree that the reason the Defence Estimates have stayed the same in terms of GNP is because of the growth in the British economy? In terms of real increases in defence expenditure, the figure is substantially higher today than it was in 1979.

Mr. Rogers: Yes, but in real terms the figure has fallen. [HON. MEMBERS: "No".] I will not engage in some puerile argument. I suggest that Conservative Members look at the Estimates, where it will be seen that, as a share of GDP, the amount of money being spent on defence is less than in 1979.I am glad that the Minister says that is right, and perhaps he should give a lesson to his hon. Friends.
That trend should also be viewed against a background of increasing inflation. In its observations on the buying power of the defence budget and on the relative price effect, the Select Committee observed that the budget takes no account of recent and continuing inflation. They are rises that will decrease spending in real terms over the next few years.
Another factor highlighted by the Select Committee was the generation-on-generation cost increases to which my hon. Friend the Member for Clackmannan referred yesterday.

The Secretary of State for Defence (Mr. George Younger): I am sure that the hon. Gentleman would wish to give the House the complete picture. I am sure that he would not like to have said all that he has without adding that, nevertheless, the level of defence spending today is some 20 per cent. higher in real terms than it was under the

last Labour Government. I am sure that the hon. Gentleman would want the complete picture to be before the House.

Mr. Rogers: The figure is still 8 per cent. less than in 1984. My argument does not depend on historicial comparisons with 1979, 1945, or 1920. My comparisons are with recent history. More importantly—and it is typical of the Government and of some of their not so bright supporters to ignore this fact—the real argument is about what is to be spent in the next three or four years. Everyone will agree that defence spending is falling.
I return to my argument concerning generation-on-generation cost increases, which concerns the factor by which the cost of a new generation of defence equipment exceeds the cost of its predecessor in real terms. The Select Committee commented that,
there is every reason to believe that it is increasing substantially.
As we know, the type 22 frigate is costing about four times as much as the Leander. That will have a significant negative effect on the Estimates, and it is one that the Government are not redressing. That is not surprising, because we see exactly the same phenomenon in the Health Service, where the Governments reaction is exactly the same. Their response, as we have heard today, is, "We're spending more money," and a refusal to acknowledge, as is demonstrated in their own figures, that they are spending a diminishing amount of an expanding GDP.
As a result, the technologies have a substantial negative effect on the rest of the Departments expenditure. That is why service men's pay, like nurses' pay, is suffering. It is also why service men, like nurses, are voting with their feet. One hon. Member who spoke yesterday made mention of the Royal Air Force pilots who are leaving to take jobs with civil airlines, and he put his finger right on the problem. Terms, conditions and pay outside are far better than those which service men currently have. The Select Committee was right to point out that awards must now be found from within the defence budget. In other words, "You can have the pay rise if the money is there to fund it." It must be a matter of great concern to right hon. and hon. Members in all parts of the House that the number of skilled and trained personnel of all ranks and abilities who are leaving the Royal Air Force is steadily increasing. The level of pilot loss from the Royal Air Force is causing substantial concern.
Yesterday, the Secretary of State for Defence and the Under-Secretary of State for Defence Procurement spoke of competition for procurement. May I ask them to harden up that comment and also to remove some of the wooliness from the comments made by the Parliamentary Under-Secretary of State for Defence Procurement earlier. The Secretary of State does not know how much is being saved. On 30 June 1986, he stated:
As the Select Committee rightly observed, it is, of course, difficult to quantify the precise savings that we make.
He went on to say that,
nobody knows what we would have had to pay in the absence of competition."—[Official Report, 30 June 1986; Vol. 100, c. 714.]
The Secretary of State was right. Nobody knows what can be saved—not the Secretary of State and not the Procurement Executive. It is a farce. What the Government are claiming is not really verifiable.
We all know about MOD estimates. Presumably they can be set at any convenient level. Certainly they have been in the past. The Select Committee rumbled that fact. It stated:
First, there is the problem of estimating what MOD would have paid for an item if it had not been competitively procured.
The permanent under-secretary of state rejected the suggestion that what may appear to be good competition might have been bad estimating. He went on to state:
What you have to safeguard against is deliberately inflating the estimates so that the eventual figure looks good.
I must admit that the thought had occurred to us, too.
I do not believe that the Secretary of State knows what he is really saying. In the 1986 debate, he tried a little harder at a later point, when he commented:
The introduction of competition for the supply of missile pallets,"—
and I am not sure how big or small are missile pallets—
which we had previously bought non-competitively, has led to the price being cut by half.
I accept what was said by the Minister, and the logical conclusion of his statement—and it was his statement, not mine—is that previously we had been overcharged, either honestly or dishonestly. If that is the case—and the Secretary of State appears to be amused, so certainly he is not resenting my comments—let the right hon. Gentleman say how much of the money from that honest or dishonest fraud has been recovered. What action, if any, has been taken against the firms that overcharged? Are they still MoD contractors? Why is it that those fraud investigations are taking so long? If there is so much money to be saved, why do not the Government post-cost all non-competitive contracts instead of the miserable percentage that are currently being post-costed?
Procurement fraud is a recurring theme in the history of the British defence industry. No doubt certain villainous shipwrights attempted to defraud the taxpayer when fitting out Sir Francis Drake's fleet. More recent scandals included the excess profits made by Ferranti on open-ended contracts for the Bloodhound missiles in the 1960s. They were discovered and Ferranti was forced to make a repayment, although nobody went to prison for perpetrating that massive fraud on the British taxpayer.
In the past 12 months, the biggest potential scandal has been the possible multi-million pound frauds carried out by Marconi. The Marconi investigation has been going on for more than 12 months. There are only seven other possible frauds currently under investigation, so why is the Marconi inquiry taking so long? Is it because the number of officers in the MOD's serious crime squad is only 28? Why is that so, when there are thousands of social security investigators probing people who have defrauded the DHSS of only £5 or £10—while the big boys in the City are getting away with murder? Do the Government accept the recommendation of the Public Accounts Committee that a telephone hotline be established for whistle-blowers on contract fraudsters? Have they ever paid any compensation to the whistle-blowers who have been sacked while helping to save British taxpayers millions of pounds? No.
For many people the distinction between irregularity and fraud is difficult to discern; nevertheless, the Ministry of Defence, for some peculiar reason, insists on such a difference. Over the past 14 years, the main irregularity —so we are told—has been contractors overcharging

without—we have been told—dishonest intention. Between 1972 and 1985, 1,100 contracts were re-examined or post-costed, and in 114 of those cases refunds were secured, totalling approximately £30 million.
The first question that I should like to ask the Secretary of State is this: why does the MOD admit that only a small percentage of contracts are post-costed? A second and more important question is why the irregularities occurred. We are told by the Department that administrative difficulties lead to such irregularities. If that is the case, why do those administrative difficulties always result in overcharging, never in undercharging? There can never be a mistake for the benefit of the taxpayer. Mistakes are always for the benefit of big business—the friends of the Tories.
Are not the Tories a little suspicious about the fact that the contractors are always overcharging? I think that they ought to be. Mr. Peter Levene, the chief of the Procurement Executive, is suspicious; if he is, why is not the Secretary of State? Why does the Minister of State find it amusing that I should bring to his attention such gross frauds on the British taxpayer? Oh, yes, it is a very laughable position. We have just heard the Government refusing to help pensioners over the Barlow Clowes affair. They say that they cannot pay compensation to them— that they cannot recover and pay out taxpayers' money —but they will allow taxpayers to be robbed by big business.
Mr. Peter Levene has said that he feels that the penalties for overcharging are not large enough. He has said that he wants to be charged on money that the contractor has to repay. The Government refuse to implement his suggestion. Why? Why will they not act on the recommendation of their senior officer? Can the Secretary of State explain it? It is obvious that the problems of fraud and irregularity will not be cleared up by a Government who will never reveal the cosy relationship between defence contractors and the MOD, and between big business and the Tory party.
Let us leave procurement and equipment. The Government next tried to make great play of presenting an aura of efficiency, suggesting that they had saved considerably on manpower while still alleging that the services were not merely maintaining capability but extending and increasing it. The Estimates state:
The programme"—
of manpower cuts, that is—
will enable us to improve our front-line capability, without any increase in total manpower".
Let us have a look at that proposition. Let us examine what is happening to the Royal Navy, for example. The Government have stated that since 1981 the proportion of Royal Navy personnel serving on the front line or immediately in its support has increased to 70 per cent. From what has it increased? Was it 69·5 per cent. last year? That is a rather nonsensical statement.

Mr. Bill Walker: Will the hon. Gentleman give way?

Mr. Rogers: I shall do so later.
The Estimates then state that the services' uniformed strength has been reduced by more than 8,000. Indeed it has: we now have 8,000 fewer sailors. That is nothing to be proud of.

Mr. Bill Walker: rose——

Mr. Rogers: I have told the hon. Gentleman that I will give way to him afterwards. If he will stop bleating I shall do so, but he really must wait until I have finished.
The Royal Navy also contains 28,000 fewer civilians. Its manpower strength has fallen by 36,000 since the Government came to power. It is shrinking in manpower as well as ships.

Mr. Bill Walker: The hon. Gentleman is showing the House very clearly his complete ignorance of defence matters. Does he not realise that the purchase of modern, sophisticated equipment means that fewer people are required to operate it? We require fewer pilots today than were required to defend the United Kingdom 20 or 40 years ago, because we have much more expensive sophisticated equipment flown by much more highly skilled and trained individuals. Fewer people are doing a much more effective job.

Mr. Rogers: I was just coming to that point, and I thank the hon. Gentleman for providing me with an introduction. I am sure that he can well remember 40 years ago.
In order to obscure the truth, the Estimates state—and now I am coming to the point that the hon. Gentleman is bleating about—
Less manpower-intensive ships are also being introduced into the Fleet; for example, on current plans, the crew of a Type 23 will be two-thirds of that needed in a Type 22.
I am sure that the Secretary of State consulted the hon. Member for Tayside, North (Mr. Walker) when he drew up the Estimates. But the hon. Gentleman cannot get away with that now, and neither can the Secretary of State. We are not going to let them get away with it. They have been rumbled by the Select Committee, and they are twisting and wriggling.
The past and present falls in manpower that we see in the Estimates, and which the Secretary of State and the hon. Member for Tayside, North are talking about, have nothing to do with the ordering of ships. We have no type 23 frigates, and we shall not have any until next year. We shall not get the rest of them until the late 1990s. The Select Committee rumbled that. It said:
The quotation above might have its place in the SDE 91 or 92, but it carries little conviction this year.
It does not carry much truth either. The Secretary of State ought not to produce estimates containing statements that are manifestly untrue and simply seek to obscure the truth.

Mr. Leigh: Will the hon. Gentleman give way?

Mr. Rogers: No, I am afraid that my time is limited. Other hon. Members want to speak.
The same tale applies to the Army and the Air Force: cutbacks and more cutbacks, with the same allegations of increased capability and efficiency. The Select Committee is right to point out to us—I ask hon. Members to read the report—that the services are being overstretched, with commanders having to do more with less, a greater burden being imposed on individual service men, front-line manpower having to take on additional tasks and skilled men having to carry out less sophisticated ones. That is the problem of the Government's cutback in manpower. Our front-line service men have not the capability to carry out their tasks.
We would require another debate to talk about the mismanagement of procurement. The list of delays—or what the Select Committee has called "fairly widespread

slippage"—is a long list indeed. Time prevents me from going into detail, but we need only look for examples to find them. There is the £288 million overspend on the Rapier, the £40 million overspend on the Harrier GR5, the £260 million overspend on the ALARM system and its slippage of several years. There is the three-year delay in bringing the Foxhunter radar into service, which has resulted in 32 Tornado fighters being put into storage. The £17 million spent on the command system was wasted, meaning that our type 23 frigates, when they actually go to sea, will not have a computer-automated command system allowing them to operate with full effectiveness.
I could go on for a long time about procurement delays, but it would be wrong for me to leave the debate without referring to the sorry plight of the merchant navy, to which my hon. Friend the Member for Dunfermline, West (Mr. Douglas) referred yesterday. The Select Committee has brought the problems to the Governments attention. Suffice it to say that the merchant navy, both in ships and men, is an extremely vulnerable part of our defences.
This debate is one of the few opportunities to examine the Governments stewardship of defence matters. Once again this year the Government are talking big and acting small. The cuts, delays and mismanagement mean that our defence commitment and roles are there only in name. If we were called upon to fulfil those roles, to honour our commitments, we would be found sorely lacking. That is the main basis of the Opposition's criticism of the Government.

Mr. Julian Amery: When the hon. Member for Rhondda (Mr. Rogers) came to the Dispatch Box I had not expected him to press for more defence expenditure. I had not expected him to criticise the shortfall in real terms in what we have been spending. I am sure that all that he has said on that will be a great help to my right hon. Friend the Secretary of State and his colleagues when they present their dossier to the Star Chamber. His speech will be honoured in the file that is put before the Secretary of State for Energy.
Of course, it was natural and right that he should try to avoid—I shall not say "evade" because it is a bad word —the great strategic issue that has divided his party by dwelling primarily on procurement. But it was a bit of bad luck that his hon. Friend the Member for Dunfermline, West (Mr. Douglas) intervened. It stuck in his hon. Friend's gullet to accept that the Government really have been quite decent in making information on procurement available to the Select Committee.
The whole subject of defence is weighty and grave. Just occasionally there is a ray of light which relieves it. I want to start my remarks by saluting the brilliant young German pilot who managed to land an aircraft in Red square. If I had to nominate anyone for the Nobel prize, he would be the one. He made monkeys out of all the top brass in the Soviet Union; and I hope that our top brass will have considered whether the same thing might have happened over here.
We have to try to reconcile two developments. There clearly has been a major change in the Soviet Union's foreign policy. General Secretary Brezhnev tried to export the internal problems of the Soviet Union by expansion. Afghanistan, Angola, Aden, Ethiopia and Nicaragua were all symptoms of that. It now seems that President


Gorbachev wishes to change that policy, convinced as he has become that expansion does not solve the problems. Brezhnev used to talk about seizing the oil of the Gulf as the minerals of southern Africa. Well, that has not worked. It has proved to be a no-win operation, as Mr. Gorbachev appears to recognise.
At the same time, as my right hon. Friend the Secretary of State pointed out yesterday, the deployment of Soviet forces on the ground shows that they are just about the same as they were under Mr. Brezhnev—perhaps a little more sinister, because they are being modernised.
Therefore, there is a problem here. The conclusion that we must clearly draw is that our foreign policy must be as flexible as possible, seizing every nuance of improvement in what the Soviet leaders say, and even appear to do. But our defence policy must mirror and reflect exactly the situation on the ground. It may be that Mr. Gorbachev's concentration on reconstruction inside the Soviet Union will lead to disarmament. It may mean that he is prepared to beat the swords into ploughshares. But that is a slow process. Making swords, as I know from my experience in procurement, is slow, and to turn them into civil equipment is equally slow. If there is to be a real reconstruction in the Soviet Union, it will mean the transfer of its best managers and scientists from the defence industries to the civil industries.
Therefore, my right hon. Friend is right to go on as we are. There could be a reversion in the Soviet Union to the policy of externalising internal problems, and we would be fools if we built our defence policy on hopes as distinct from facts.
Even taking a hopeful view, we have to recognise that changes are not only taking place in the Soviet Union. Whatever the outcome of the American presidential elections in November, I suspect that there will be great pressure in the United States to limit its overseas commitment to Europe. I do not think that it will abandon its commitment. I do not think that it will abandon our allies. But, over the years, it has carried a disproportionate amount of the burden, and with its trade and fiscal deficits we must expect that it will reduce its effort, particularly as problems are increasing at the other end of the world—the Pacific rim—where it is, economically, financially and security-wise, as interested as it is in Europe.
Therefore, we in Europe will have to fill any gaps that may arise. This is not the occasion to go into what kind of European union we want—I shall have plenty to say on that subject in another debate—but I think that we are all agreed that there will be a European union. That comes out just as much in the Prime Minister's speeches as in others. Therefore, we must give thought to how, collectively, we Europeans will protect and promote the joint interests that we are in the process of forming. Protection and promotion mean defence, and there is a gaping hole in the heart of it. Europe cannot be defended without France, and France, although an Atlantic ally, refuses to take part in the defence organisation that has been created for the defence of Europe. President Mitterrand re-emphasised that in a speech the other day.
Frankly, I think that the French are mistaken. I can understand that, when the Americans were in a position of hegemony, when they dominated the European scene, General de Gaulle felt uneasy about it. But that is not the

situation today. The Americans are asking, almost begging, us to play a bigger part than we do. Therefore, I think that the French are wrong, but we must live in the world as it is. Interesting Franco-German defence agreements are being made. I hope that there are an increasing number of Anglo-French and Anglo-German projects under review. But, somehow, all that wants bringing together.
Since 1946 I have been a believer in Europe. I am the last survivor of the little group that sat with Churchill in the autumn of 1946 and decided to start the European movement. Would not the best way be to put more weight into the Western European Union? That was, after all, a British conception. It was launched by Anthony Eden when the French rejected the idea of German rearmament. We persuaded them to agree to German rearmament by committing a corps and a tactical air force to the continent on a permanent basis. Our concept was simple, and its importance is only now beginning to become clear. There was a memorandum that persuaded Eden that we needed two boxes—a box to keep the Russians out, which was NATO, and a box to keep the Germans in, which was the Western European Union. That is what we went for.
I do not think that boosting the WEU will weaken the American commitment. The Americans are in Europe because it is in their interests to be in Europe. A very big European effort indeed would be needed before the Americans could feel safe enough to withdraw massively from Europe. However, if we strengthened the WEU, that might anchor West Germany still more firmly into the western European family. That is important, at a time when the siren voices of neutralism are being heard quite loudly in different parts of Germany.
There is another reason why it is important to strengthen the WEU. If the bipolar world—the world that has been dominated by the two super-powers—is to recede, though I am not sure that it will, and if a more multipolar world is to take its place, we must expect problems to arise for states that were previously subordinated to the two great alliances. Even during the time of the bipolar world, that has been happening. The Falklands and the Iran-Iraq wars are examples, but new crises may arise between countries that are now less subordinated to the two super-powers.
The newspapers are full of stories about Serbian nationalism. I do not intend to weary the House by discussing that problem, apart from recalling that world war 1 started with an outburst of Serbian nationalism that culminated in the assassination of the archduke. The Balkans are still a possible powder keg. So is the middle east, so is Africa. Europe will not be the policeman of the world—at least, I hope not—but Europe has worldwide interests and it is our duty to protect and promote those interests. The Gulf war demonstrated that fact.
When my right hon. Friends consider their defence policy, I beg them to keep seriously in mind the importance of the Western European Union. We need to keep the Germans in the western bloc and strengthen the European pillar of the Atlantic alliance. We need an organisation in which we can give thought to how European interests outside the area can best be protected and promoted.

Mr. Menzies Campbell: Unexpectedly, I found that I was unable to be present for the opening speeches yesterday evening. I have written to the Secretary of State and to the hon. Member for Clackmannan (Mr. O'Neill), who opened the debate for the Opposition, offering apologies for my absence.
Throughout the debate generous tribute has been paid to those who serve in our armed forces. I am happy to associate myself with that tribute. However, I wish to pay a particular tribute to those who perform search and rescue operations around the coasts of the United Kingdom. I have a particular constituency interest in that matter, but it is also a matter of national significance. Many hon. Members will know that a review of such operations is taking place. The Under-Secretary of State for the Armed Forces who is to reply to the debate knows of my particular interest in the apprehension that is felt about the future of the search and rescue operations at RAF Leuchars in my constituency. A flight of 22 Squadron, flying Wessex helicopters, provides that search and rescue facility.
Until this year, 138 missions have been flown and 98 people have been rescued. On average, 90 per cent. of rescues are civilian rescues. On a daily basis, the pilots and their accompanying observers and winchmen have to display great skill and courage—almost always in very unpleasant and dangerous conditions. As we have heard, a review is taking place. Some of us, including the hon. Member for Tayside, North (Mr. Walker), who has taken a keen interest in the matter, had hoped that before the debate we might be told the precise result of that review.
The Minister was extremely courteous when he listened to what we had to say. In particular, he received from Fife a delegation comprising the district council, the regional council and me. We welcomed that, but we should welcome all the more a decision that the existing service is to be retained.

Mr. Bill Walker: I do not want anybody to think that it is only in Fife that the civic authorities are concerned about this matter. The hon. and learned Gentleman knows that he has the full support of Tayside in all the efforts that are being made to retain the Wessex helicopter squadron. Many of the rescues are carried out in Tayside, and it is fair to say that the majority of those rescues take place in my constituency.

Mr. Campbell: The Minister will be in no doubt about the strength of feeling at every level of government in central Scotland about the issue.
The Government's announcement of February 1988, to the effect that search and rescue would be retained so long as there was a military requirement for it, has not alleviated much of the concern. I do not expect the Minister to tell us today about the results of the review, but can he say when he will be able to give us the results? Since the review has not yet, I presume, been completed, I can do no better than to refer him to the last sentence of paragraph 10.6 of the seventh report of the Select Committee. It says that
the withdrawal of SAR facilities from Leuchars would mean that large areas of central Scotland would have no daylight SAR coverage within an hour from call out.
The last sentence of the following paragraph is in heavy type, which I suppose means that it is emphasised. It says:

It would not be acceptable for military SAR facilities to be withdrawn from RAF Leuchars without there being a requirement that any civilian facilities should use aircraft as capable, and have readiness states and back-up at least as good, as those provided by the military.
I intend also to refer briefly to the closure of the Royal Ordnance factory at Bishopton. The case concerning the property elements of that closure have already been eloquently deployed. Last night the hon. Member for Renfrew, West and lnverclyde (Mr. Graham) spoke most movingly about the consequences of the closure to his constituents. However, my concern relates to the possible strategic consequences of that closure. I understand that Bishopton is the United Kingdom's prime manufacturer of gun propellants and that it has a unique nitroglycerine manufacturing facility. It employs 1,100 skilled, experien-ced and loyal workers.
What consideration has been given to the consequences to our defence capability if the factory goes out of production? What assurances have the Government received about continued production and supply? And is it really true that we might find ourselves, in extremis, having to rely on foreign manufacturers? At best that would make us vulnerable. At worst it would put us at severe risk.
Tribute has already been paid to the Select Committee's work. I can do no more than say that in its consideration of the Royal Navy's surface fleet, in its sixth report to the House, that tribute is more than amply justified. It behoves all of us to read that report and the Governments response to it and form a judgment as to where the truth lies. I do not understand the Select Committee to have changed its conclusions because of the terms of the response. Perhaps it was hardly encouraged to do so when the Government's practical response to its report was to order three new type 23 frigates.
I ask the Government to lake account of the fact that great uncertainty surrounds shipyards such as Yarrow and Swan Hunter as a result of the Government's current shipbuilding programme. Building the ships that the Royal Navy requires necessarily involves high levels of investment and skill. To justify such investment and to maintain such skills there must be long-term orders or at least an expectation of them. Skills are frequently difficult to acquire but easy to lose.
There is also uncertainty about helicopters. On 9 April 1987, the Secretary of State for Defence announced an intention to place an order with Westland for 25 utility EH101 helicopters for delivery in the early 1990s. The EH101 is a basic design. Since the announcement, the Ministry of Defence has, I understand, attempted to define its detailed requirements and may even now be embarking on project definition studies. The result is that 1995 is probably the earliest achievable delivery date.
I am sure that I am not the only hon. Member to have received representations on this matter, but I must tell the House that the company views the delays with considerable concern. I hope that the Minister can give the company some comfort today and assure it that further delays are unlikely.
It is inconceivable that the secure defence of the United Kingdom can be ensured other than through our membership of NATO. For the foreseeable future, NATO will be a nuclear alliance. I find myself in almost total agreement with the right hon. Member for Brighton, Pavilion (Mr. Amery); any contact with officials or politicians in the United States makes it clear that,


whoever wins the presidential election next month, the issue of a greater European contribution will undoubtedly be on the agenda. There is a risk of overemphasising the United States position. I do not believe that there is any mood of isolationism, but there is a mood of realism brought about by financial circumstances there, particularly the budget deficit.
We cannot ignore the possible political consequences of the economic changes of 1992. There are undoubtedly uncertainties in that connection, but there may be opportunities as well. A more integrated Europe might find itself compelled and encouraged to make a greater contribution to its own defence. It is clear, however, that, by 1992, all but £1·8 billion of the expenditure on Trident will have been incurred. Just as Polaris could not be towed out to sea and sunk—which I think was suggested at one stage—we will not be able to switch Trident off as if it were a conveyor belt. Whichever party is in government by 1992, it will have Trident effectively, if not completely, in place.
No matter what is said in the debate or outside the House, the party that forms the Government in 1992 will not unilaterally remove Trident. The intermediate nuclear forces treaty has changed all that and the debate in 1992 will be about keeping a strategic nuclear deterrent in the United Kingdom or being willing to dispose of it if one is satisfied that that is safe. It is wrong to think that that debate will necessarily be domestic, because if the United States and the Soviet Union achieve a START I treaty and move on to START II, it is almost certain that there will be great pressure on the United Kingdom to put her weapons on the table.
Leaving aside the difficult question whether we should own or lease the missiles, we cannot ignore the fact that the United States might, because of its commitment to START II, be unwilling to remain co-operative in those respects in which the United Kingdom relies on it for the servicing of missiles.
It was not always popular in my party to be in favour of deployment of cruise missiles. There was a curiosity in the opinion polls of the time—they showed that a majority of people opposed cruise but favoured retaining the independent nuclear deterrent. The Government take great credit for the INF treaty. It is partly justified, but the issue is not quite as simple as they claim. It is clear, however, that if there had been unilateral withdrawal of cruise missiles during the time of Mr. Brezhnev it is unlikely that there would have been any response.
My criticism of the Government is that they seem to be unduly pessimistic. I accept the need for caution in these matters but caution and optimism need not be mutually exclusive. We must accept that Trident will effectively be in position by the next general election. The weapon's life goes beyond the end of the century. It is highly unlikely that any Government will be capable of removing or be willing to remove Trident unilaterally. If a safe means of arms reduction can be arrived at without prejudice to our safety, we should adopt it, but there can be no reduction unless there is satisfaction, in so far as one can be satisfied, that our safety will not be prejudiced.

Dr. Alan Glyn: I should like to pay tribute to my right hon. Friend the Secretary of State for Defence and his colleagues for the excellent colour and quality of the Estimates.
Defence consists of strategy and tactics. Strategy is the ability to estimate the strength of one's enemy now and in the future. Tactics are through NATO and the flexible and dual response and the retention of Trident.
We all welcome the historic summit between President Reagan and Mr. Gorbachev in December 1987. We note that it might be the first step towards some form of arms reduction, both conventional and atomic. We must remember, however, that in the same month as that summit, my right hon. Friend the Prime Minister met Mr. Gorbachev at Brize Norton, where bilateral negotiations were made possible. We should give credit to our Prime Minister for that, and it was a step in the right direction.
We all know that the Warsaw pact has more than 3:1 superiority in artillery, 2:1 superiority in tactical aircraft and hundreds of thousands of chemical weapons. It also has nuclear warheads targeted towards NATO. My right hon. Friend the Prime Minister has always maintained that until we can get a lasting and satisfactory disarmament agreement, we must retain our nuclear deterrent. I entirely agree with her.
My right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) mentioned the United States. I agree with him that they have problems on their doorstep in central and south America. They sometimes chide us and say that we should spend more on defence, but I think that they will always be our main ally in NATO—let us hope so.
Mr. Gorbachev has achieved an incredible victory in his own country by beating the conventional Communist clique. He realises that unless he can achieve a powerful industrial and agricultural output he has no future. With such a background, it would be possible to pay for increased arms production. Let us not forget that the Soviet Union is increasing arms production day by day.
There is also the possibility that the satellites, on which Mr. Gorbachev places so much importance, could either give him difficulties or strength, according to their wish. Their will and their degree of independence—and their independent views—have already become apparent to the world. A change in leadership could mean an alteration of policy.
I shall now turn to what I regard as one of the most dangerous things happening now. Hostile relations between Russia and China have resulted in at least 500,000 troops being stationed on the Sino-Soviet frontier. If an agreement was made between those two countries—and it looks as if there will be one—we would be faced with an estimated 500,000 troops who could be deployed under the Warsaw pact. Far more importantly, if that agreement was to go even further and there was a military alliance between Russia and China, we should be faced with one of the most powerful combinations and an enormous defence problem. That is why it is terribly important that we should always anticipate that possibility in our defence strategy.
My right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) said yesterday that we should anticipate possible and future alignments and that we should always ensure that we have sufficient in our


armoury to defend ourselves. That is why reductions must be verified, and must, at the same time, not reduce in any way our ability to make our contribution to NATO and our own defences. I referred to the United States earlier. It will always play its part in Europe.
I wish to speak next about the Reserve. I welcome the national employer liaison committee, although I am not sure whether it will work, because of factors beyond the Governments control. The Government will have to think again about how we can build up a sufficiently strong Reserve and Territorial Army that can take its place in NATO and fulfil its essential commitments in the defence of this country.
I thank my hon. Friend the Under-Secretary of State for the Armed Forces for coming down to Victoria barracks and helping me. I hope that he does not have to face the Star Chamber for long when it comes to rebuilding the barracks. We visited the Life Guards together on the way and learnt two lessons there. One important lesson that we learnt was that the versatility of the Army today is quite incredible. The second lesson was appreciating the difficulties of manning equipment such as tanks that are highly sophisticated and require a great deal of training. One has to balance sophistication and training to ensure that there are enough men to absorb the complicated technology that is now incorporated in almost all weapons.
I fully support the Government. I support their retention of Trident and I support almost everything that they say in the defence review. I hope that this country will be able to play its part not only in NATO and in other parts of the world that people tend to forget, but that we shall be able to assist in the process of world disarmament.

Mr. A. E. P. Duffy: The Defence Estimates before the House represent a reduction in real terms of 2·6 per cent. a year. Inevitably, hon. Members yesterday expressed anxiety about how long the Government can keep the lid on defence spending while meeting current commitments. The Secretary of State for Defence himself admitted that difficult choices cannot be avoided.
Yet the existing gap is nothing like the chasm that is likely to open up between commitments and resources in the next few years. The scale of some forthcoming procurement decisions will prevent the Secretary of State from finding relief in slippage, cutting some marginal tasks out of area or the more efficient management of procurement. It is little wonder that a leader in The Daily Telegraph this summer described the "Statement on the Defence Estimates 1988"as
bland and … self-congratulatory as ever
or that Mr. Leon Brittan, in his pamphlet "Defence and Arms Control in a Changing Society", said:
The Government should not put off a wide-ranging review of defence policy.
We are witnessing once again the syndrome that existed in the 1970s, which was so soundly criticised by Conservative Members when they were in opposition, as well as by this Administration when they came to power. In the 1970s, the resources that successive Governments were prepared to justify to Parliament were never quite sufficient to meet the commitments and capabilities that those Governments equally thought it necessary to maintain. I experienced that phase when I was on the

Treasury Bench, but I was part of the Government who eventually took steps to match resources with commitments.
Whereas in the 1970s commitments were pruned—as they were following the 1974 review; there is no doubt about that—they have now been kept at roughly the same level for the past six years, and in certain cases even increased. At the same time, we are edging into a very expensive phase of procurement, involving, for example, the completion of the Tornado programme, the arrival of Trident, the replacement of the aging Chieftains, the maintenance of amphibious capability and the development of the European fighter aircraft—not to mention a large and increasing number of quite unnerving cost overruns to be found in table 2 of the Estimates. Yet competitive tendering actually fell over the past year, as is also revealed in table 2.
The outcome is bound to have a harmful effect on training, activity and professional standards, governed as they are by such factors as petrol, spare parts and ammunition—the only respects on which money can be saved in the short term. In consequence, there is an effect on morale and retention rates, which are already worsening quite significantly, as was confirmed in our exchanges yesterday. That is the natural consequence of overstretch and curtailment of activity.
Let us consider briefly the three services. The role of the Royal Navy cannot be filled by any other ally. Nevertheless, the Navy will account for only £2·5 billion of the Estimates, compared with the more than £4 billion that is to be spent on British forces in the central region. Hon. Members on both sides of the House must be concerned, therefore, that doubts should continue to arise year after year about the size and effectiveness of the fleet, especially in view of its NATO-assigned role and the escalating size and power of the Soviet navy. NATO is a maritime alliance; the Warsaw pact is not. Yet the Government's inadequate provision for the Navy is something to which every independent expert bears witness. Plainly, that provision is now inadequate to allow us to discharge our NATO role, much less continue to meet out-of-area commitments. SACLANT says that he is now 45 per cent. short of the escorts that he needs and the Commander-in-Chief, Fleet does not have adequate operational assets, according to the Select Committee on Defence.
The surface fleet of destroyers and frigates numbers "about 50", the Ministry of Defence says—in itself a change from the previous absolute commitment to 50 ships. Currently, there are 13 destroyers and 35 frigates available—48 vessels. But of these, three destroyers and 11 frigates are in refit, on trial or being used for training, leaving just 34 operational. In other words, almost all the Nott proposals of June 1981, to which both sides of the House were then opposed, have been achieved by 1988. Nott recommended only two carriers, and we are just about to mothball one. We do not have the men to run the carrier that is about to be mothballed.
Caught out by the statement on the Defence Estimates in 1988 by the Select Committee, the Secretary of State rushed to announce the ordering of three more type 23 frigates. Yet he invited tenders for four frigates just a year ago. That is an example of slippage. Because the defence statement is so professional—look at it, Mr. Deputy Speaker—because it is so glossy and so presentational, seemingly full of information, graphs and essays, it is so


potentially lulling, comforting and even deceiving. The only way in which hon. Members can deal with it is really to study it—as most demonstrably do not, as can be seen from debates year after year—and ask questions.
With the greatest respect to the Minister who opened the debate, we got the kind of speech that we get every year under this Administration—a long speech that bears little relation to the subject. What he had to say is very important but it can be said under two other departmental headings. What we are here to do—we cannot do otherwise—is to discuss the statement. The best way in which we can address it is to raise questions.
That is the best way in which hon. Members can assist the ongoing debate on defence—to go on raising questions such as what is the present age structure of the surface fleet? How many vessels are operational, in dockyard hands or on disposal lists? We do not always have up-to-date information on what ships are on disposal lists. How many of the minesweeper orders planned under a £1 billion modernisation scheme will be completed by the 1995 deadline? How many type 23 frigate orders are envisaged by 1991, before, as my hon. Friend the Member for Rhondda (Mr. Rogers) reminded us, they are overtaken by the NFR90 programme? Is it true that the first two type 23s will probably sail without an effective central command and control system? That was the whole purpose of the type 23 programme, because, of course, the NFR90 ships will have another role to play. Above all, why is British sea power apparently more highly prized by the Kuwaiti Government than by Her Majesty's Government?
The Army, according to The Economist on 27 May this year, "is seriously underequipped". The problem of replacing Chieftan tanks is well known, but the Army has a vital need also for modern artillery and air defence weapons. Three questions arise: first, given the stress laid on air mobility on page 24 of the statement, when will the EH101, to which the hon. and learned Member for Fife, North-East (Mr. Campbell) referred, succeed the Puma in that role? Secondly, when will the multi-launch rocket system, referred to on page 312 as "under order", come into service? Thirdly, does the full development of the third generation of anti-tank guided weapons, mentioned in paragraph 4.4, allow for the latest Soviet tank technology, notably the FST1?
The RAF has received more favourable funding in recent years, but there remain two significant gaps in the RAF's aircraft inventory. The delays in acquiring a modern airborne early warning aircraft are well known. We heard yesterday from the Secretary of State that we cannot afford the full complement. I should like to know when the first E3A aircraft will be delivered. That would be helpful to the House. Will it just slip? The other gap is the lack of specialised electronic warfare aircraft, such as the EF111 or the F4G "Wild Weasel". If West Germany sees the need to acquire a Tornado variant for the job, why are we preventing our own tactical air force in the central region from having one?
I have other questions. First, when will Tucano production catch up on the original schedule? Secondly, when will the much-delayed tail end of Tornado GR1 deliveries finally occur? Thirdly, how long is the Tornado ADV radar expected to remain a problem? What is the

future of the 32 mothballed Tornado F2s? When is the improved UKADGE mentioned on page 23 of the statement expected to become operational? Finally, when, oh when, will we have a modern IFF?
Compared with last year's hawkish treatment of Soviet foreign policy, the present Estimates display considerably greater willingness to accept the reality of change in the Soviet Union. Yet the Government are still saying that, as East-West relations improve, as the Russians withdraw from Afghanistan and as they implement the INF treaty, it is appropriate to respond with a vast increase in Britain's nuclear capacity.
That is a gross misjudgment of our real security needs, as the North Atlantic Assembly—of which I am a member —composed of Members of Parliament from 16 member nations, recognises in a new report. It considers that those needs are to improve the conventional balance in Europe, to strengthen the European pillar and to acknowledge and encourage the very welcome developments in the Soviet Union. That is the view of the parliamentary side of our alliance.
I recommend that report to hon. Members. It is a fascinating blueprint for a new and more equitable relationship between the transatlantic members of the alliance. They see that relationship as having changed. Therefore, they ask how NATO is to change with it. Should we not start with a strategic rethink with a view to greater flexibility and seek a strategy of flexible, minimum deterrence? I hope that in next year's Defence Estimates we shall have an essay on those issues, because the permanent under-secretary in the Ministry of Defence is eminently qualified to address those vital questions. In conclusion, perhaps the biggest threat we face currently is the danger of the status quo.

Mr. Deputy Speaker (Sir Paul Dean): Order. I remind the House that the 10-minute limit on speeches is now in operation. I ask hon. Members who are called to keep an eye on the clock.

Mr. Cyril D. Townsend: The House always listens very attentively indeed to the hon. Member for Sheffield, Attercliffe (Mr. Duffy) as he has a great knowledge of defence matters and, as I said in March this year when I followed him in a debate on the Royal Navy, he has a genuine determination to see the Royal Navy enhanced and strengthened. But, alas, he is in an impossible position. Only a few weeks ago at the Labour party conference a resolution was passed proposing that Britain's defence expenditure should be brought down into line with our European partners. As all my hon. Friends know, that would mean massive cuts in Britain's defence equivalent to about the cost of running the Royal Navy.
We mark this year the 71st anniversary of the Bolshevik revolution which brought about the Soviet Union. I do not think that I am going too far in saying that at the moment the Soviet Union is in danger of being a Third world country with First world weapons and the First world's best space programme. It is a country in chaos with a bloated bureaucracy and a military and industrial complex out of control. Of course we all wish the secretary general the best of luck in trying to reform and modernise his system and cut back on the defence effort of that country, but I am not sure I would give him more than a 51 per cent. chance of succeeding.
Lord Carrington, who has just completed a very successful period with NATO, said:
When it comes to plain facts, there has been no reduction yet in Soviet military power, no diminution in the rate at which new tanks, ships and aircraft are flowing off the production line. Expenditure on procurement continues to grow at nearly 3 per cent. a year, despite Mr. Gorbachev's peace rhetoric and his interest in slowing down the military machine.
The same noble Lord said in a speech in Oslo in 1985 —it is worth drawing his remarks to the attention of the House—that if there is an elephant in one's neighbour's garden, it may make sense to study its intentions but equally it makes sense to have a strong fence to protect one's flowerbeds. We are right to keep our guard up in these changing circumstances while hoping for the best.
In August this year—this is a sign of the times—the United States Defence Secretary, Mr. Carlucci, gave an address at the Soviet military academy in Moscow. While speaking to the assembled company he said:
we have difficulty in reconciling a defensive doctrine with what we see in Soviet force structure and operational strategy as an emphasis on the offensive—especially on surprise and manoeuvre. I refer to such things as the operational manoeuvre group concept, forward-based bridging units, and the heavy emphasis on tanks and artillery. At the same time, we see no shift of emphasis to the kind of forces typically associated with defence.
I hope that the House and the country will ask the basic question as to why, in October 1988, the Soviet Union constantly practises the river-crossing exercise with its shock armies. Why does it base so far forward and so close to the German border so much ammunition and petrol, oil and lubricants? If we cannot get a satisfactory answer, surely we have no alternative but to keep on strengthening our own defence effort and improving our co-ordination with our allies.
I want to draw attention to the enhancement of the weapons systems of the Soviet Union. We used to say, with some confidence, "We do not need to match the Soviet Union tank by tank, aircraft by aircraft or submarine by submarine because we have a technological edge." Sadly, we are losing that edge. I remind the House of the new Typhoon submarines that the Soviet Union has deployed. They are quiet and hard to detect. It will be difficult for our submarines to keep abreast of that stealth technology. We talk about our reactive armour. The Soviet Union has the same thing. We must spend our money on gaining and keeping a technological gap. If we do not, without the numbers behind us, we will be in real trouble.
I cannot claim great enthusiasm for deciding on the new tank for the British Army of the Rhine. I suggest to my hon. Friends on the Front Bench that the way forward is through improved surveillance methods and precision-guided missiles. In this day and age, if one can find, one can hit and if one can hit, one can destroy.
I want to draw attention to the lack of helicopters in the British Army. There was a recent display and exercise on Salisbury plain which drew attention to this. Many of my hon. Friends will have further details. We have allowed the British Army to fall behind other armies in NATO and the Warsaw pact in this respect. The time has come to improve helicopter capability.
Saint Cyril was once described as a fearless and courageous preacher of the orthodox, in theological terms. I have tried to be the same in defence matters. I hope that I may be allowed to raise two further points which are not quite so orthodox. The first concerns the need for a defence

review. I am by no means a lonely voice among Conservative Members on such topics. My right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan), before clearing his desk to move to Brussels where I hope he will keep Kent suitable and safe for grazing heifers and Tory voters, called for a defence review. He was wise to do so. It should not be an issue between the parties. Sir John Nott carried out the last defence review under great pressure from the Treasury. He had to find big cuts in a short time. The inter-service mechanism was not at the advanced stage that it has now reached and the results of that review are well out of date. For example, there has been the INF agreement. It would be wise of the Government and in their own political interest to recognise that. The previous election is over one horizon and the next election has not yet appeared on the other one. This is a good moment to study Britain's defence capabilities and the new challenges we face in the new world to see how we can best proceed.
The second matter—this is one of my many lost causes but I am happy to bring it forward for consideration by my hon. Friends—is the need for Britain to place less emphasis on its continental effort and more on its maritime effort. I have considerable firepower behind me on that issue. However, at least three Secretaries of State for Defence have quietly taken me aside and said, "Cyril, you are wrong. Please understand that you just harm everything by talking like that. Don't you understand that the United States is under great pressure to cut back on its 327,000 service men in Europe and that Germany does not want to carry our burden in Europe?" Since the time of Marlborough standing armies in Europe have not been popular with the British people. I do not believe that it is the best use of limited defence resources. We would be true to our traditions and would be looking after the best interests of the defence of the free world if, over a period of time, we could disengage from the continent and increase our maritime effort. I should like to see the Cabinet discussing that matter and I should like lo see a cautious Civil Service statement in the defence White Paper that, in the long run, that is where Britain's defence interests lie.

.17pm

Dr. John Gilbert: The debate has come far too late in the year. It is a scandal. It is wrong for defence to be pushed back into the mop-up session just because of the incompetence of the Government's business managers. I hope that we shall be given an assurance that there will never again be five months between the publication of the White Paper and the debate. If we do have the debate this late, let us have it when the Secretary of State has some idea whether he has won his annual battle with the Treasury.
It will not surprise many hon. Members to know that I find myself unable to support the amendment in the names of my right hon. and hon. Friends merely because of one phrase which relates to the cancellation of Trident. I do not propose to weary colleagues with explanations of my reasons for that because I am sure that they are fairly well known. I want to place on record that I am content with the rest of the amendment. I am delighted that it calls on the Government to
use resources to secure our non-nuclear defences and to work actively"—
those are beautiful words—


for the reduction and abolition of nuclear weapons in Britain and elsewhere".
I congratulate the Front Bench spokesmen for not mentioning unilateralism or saying that we should have no nuclear weapons in our hands, in our territories, or on our territorial waters. I welcome the slow move back towards the traditional defence policies of my party. However, there was one extraordinary passage in the speech of my hon. Friend the Member for Clackmannan (Mr. O'Neill). I gave him notice that I intended to raise the matter. He talked about a peace wing and war wing in the Labour party. I do not know of anybody in my party who is in a war wing or who wants a war. I hope that it was a slip of the tongue because he will be hard put to identify anybody in the Labour party who wants a war with anyone.
I congratulate my hon. Friends the Members for Sheffield, Attercliffe (Mr. Duffy) and Rhondda (Mr. Rogers) on their catalogue of inquiries of Ministers about the state of our defence equipment programme. I notice that not a single Minister had the courtesy to make a note when either of my hon. Friends was speaking, so I suppose that we cannot expect answers to their extremely important questions. The only other explanation is that Ministers know the list already and are preparing the answers anyway, but I should be surprised if that were the case.
My hon. Friend the Member for Attercliffe produced a superb list of problems in the Ministry of Defence and I shall add a couple, one of which is at least a scandal. At least one Minister in the Ministry of Defence must be extremely grateful that the DROPS affair has not been considered in detail by the Select Committee on Defence.
I am concerned that a choice will have to be made between an American and British tank. This country has had a dismal history of tank production since the Chieftain tank was introduced in 1966. We have no record of which we can be proud of co-operation with our allies over the debate on smooth and rifle bore, and what should be the size of the bore of the tank gun, and we have had a dismal record in selling tanks abroad. Unless the new owners of the Royal Ordnance factories can do something about selling more tanks, we should get out of the tank-making business altogether; we would probably be far better off buying German, if not American, tanks. MBT80 was on the stocks when I arrived at the Ministry of Defence in 1976, but we have not progressed much further with it.
I am worried about the state of the fire control systems that are available to the Royal Navy. I cite in aid the appalling disaster in the Gulf not long ago when an American warship, which had the most modern fire control systems, shot down an innocent airliner. I do not seek to place blame on any of the individuals concerned, but an article in New Scientist of 5 May reports—I should be grateful for some response from the Minister on this —that the Ministry of Defence has had to cancel an order for a computerised command and control system for the new type 23 frigates. The article says that the Ministry of Defence has
spent £30 million on the project, but the system could not cope with orchestrating all the weapons and sensors on the frigates.
This means that the officers on board four Type 23 frigates that will be launched between now and the 1990s will have to rely on operating each sensor and weapon independently.

If that is so, we are faced with a serious problem, with no guarantee that the disaster that overtook that airliner and American warship could not happen to one of our own warships.
I have never concealed my scepticism about the European fighter aircraft, which was known as the AST403 in 1976. It was supposed to be a Harrier-Jaguar replacement and to be optimised in the ground-attack role. It is now to be optimised in the air-superiority role, but I have never heard a single satisfactory word of explanation from a Minister of why that U-turn in the function of the aircraft has taken place. I strongly suspect that it is to do with industrial and political considerations in terms of co-operation with the French or German defence industries rather than being related to the needs of the Royal Air Force. It would be extremely interesting if Ministers said whether the United States is releasing its stealth technology for the EFA project or, if it is not, whether they are confident that our stealth technology matches that of the Americans.
On page 65 of the White Paper—the Minister need not look it up, as it is not a point on which I want a reply —there is mention of the forces in eastern Europe that are not on the central front. I do not take issue with the figures given for the central front or eastern Europe, but it is a fact that the other Warsaw pact land forces—I recently returned from a trip to Hungary, Bulgaria and Romania —are, for all practical purposes, no more than supernumerary agricultural workers. They spend most of their time in the fields digging ditches and cutting hedges. I cannot foresee their being of any serious military use, other than in the defence of their country—certainly not in any forward deployment.
The hon. Member for Bexleyheath (Mr. Townsend) made the extremely valuable point that the quality of Soviet material is now outpacing ours in various directions. He drew attention to the Typhoon submarine, about which we have known for some time, but there are serious suggestions that the Soviet Union is outpacing us in the quality of battlefield munitions, and that must be of considerable concern. It gets most of its technology from breaches of COCOM.
I am concerned that the Ministry of Defence does not put nearly enough resources at the disposal of the COCOM office inside the Ministry. The Select Committee on Trade and Industry has taken a little evidence about this matter, and, as I understand it, there are three officers on full-time duty in the Ministry of Defence attending to COCOM matters. Anyone who has visited the office of technology assessment in the Pentagon, as I did recently, knows that the United States has about 200 people devoted to this extremely important work, and it is high time the Ministry of Defence paid more attention to it.
I can understand why the Secretary of State is experiencing difficulty agreeing his defence Vote with the Chief Secretary to the Treasury. One reads in the newspapers that the Secretary of State is cooling his heels in the Treasury's ante-room. I take it that that is another of Mr. Bernard Ingham's insulting briefings about Cabinet Ministers. I can believe that the Treasury is unsympathetic to the politics of burden-sharing, and I very much agree with the right hon. Member for Brighton, Pavilion (Mr. Amery) and the hon. and learned Member for Fife, North-East (Mr. Campbell). Whoever wins the next election will come under enormous pressure for a reduction in American ground troops in Europe. Had I


been speaking yesterday, I would have made a different peroration because I understand that Vice-President Bush has given a firm commitment—if he has been reported accurately—that there will be no reduction in the American military presence in Europe. I foresee no reason for complacency because there will be enormous pressure on the matter in Congress, which controls the defence vote. Our budget, despite the efforts of Ministers to pretend otherwise, is on a downward trend in real terms, and I hope that the Secretary of State will win the fight that he must win with the Treasury to obtain an adequate defence Vote.

Mr. John Wilkinson (Ruislip-Northwood): To some extent, our debate is a victim of the peace process. Increasingly, the people of Western Europe are coming to take at face value the statements of General Secretary, and now President, Gorbachev.
The general secretary expressed the hope that all in western Europe will live in the same house. The people of eastern Europe have a different wish. They do not wish to live in the same house as the Soviet Union. More and more, they are asserting their different identities and reverting to their historic and national roots. There are nationalist movements in the Baltic states, the Ukraine, Byelorussia, Armenia, Georgia and in the Balkans, to which my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) alluded. They are movements of fundamental significance, but, as I have said before, empires in decline can be at least as dangerous to their neighbours as empires that are expanding. If one looks at the history of what has happened in the periods of decline of the Ottoman empire, the Austro-Hungarian empire, the French empire, the British empire, the Portuguese empire and many others, one sees that the processes of decline were accompanied by conflict. We cannot be sure that such conflict in Europe will not overspill, with dramatic consequences. We must, therefore, be vigilant, as my hon. Friend the Member for Bexleyheath (Mr. Townsend) so wisely reminded us.
At the same time as change is afoot in the Soviet Union, the Soviets new peace policy is encouraging western Governments to increase their credits to the eastern bloc, to increase the flow of high technology to the eastern bloc and greatly to expand East-West trade without predetermined quid pro quos being demanded. The result of the process could be a much strengthened Sovied Union in economic terms. In military terms, it is clear that the capability of the Soviet armed forces continues to grow across the spectrum—in both strategic and conventional weaponry. As yet, there has been no sign of substantial changes in military doctrine or of substantial reductions in force posture by the Soviets. It is important that we be vigilant and that, as resources are so constrained, we should seek ever better value for money.
I am afraid that this will be a difficult affair for the British Government. They have shown great responsibility in their conduct of the nation's defence. I praise my right hon. Friend the Secretary of State for Defence and his ministerial team. I know as a Western European Union committee chairman how helpful they have been, for example, in organising the WEU symposium on military research in London in March and in providing for visits by my committee to the tri-national Tornado training

establishment at Cottesmore and to the Aeroplane and Armament Experimental Establishment at Boscombe Down. They have been helpful, positive and encouraging in every way, but they are up against a fundamental problem—lack of resources.
The pay of the armed forces must go up at least in keeping with the rate of pay in the civil community. The cost of weapons increases rather more than inflation. All this happens at the same time as our defence budget decreases in real terms and, although I acknowledge that the decrease is a fairly recent development, it is a fact that the Government must face. This squeeze on resources is impelling my right hon. Friend the Secretary of State yet again to go cap in hand to the Treasury in this expenditure round to ask for more money. My right hon. Friend knows that unless he gets more money the circle cannot be squared.
Unless my right hon. Friend gets more money, it will be dificult to honour the Government's pledge in their answer in Cm. 443 to the report of the Select Committee on Defence on the surface fleet. The Government said:
The Government has provided substantial additional resources for defence, including additions in the last Public Expenditure Survey round, so that commitments can be sustained. There is thus no need for or question of a defence review, whether 'by stealth' or otherwise.
Over the past six years I have spent much time—I have co-authored two books and chaired the Omega committee report of the Adam Smith Institute—vainly trying to suggest that it would be wise for the Government to embark upon a review. For a long time this budgetary bind has been plain for all to see. I have suggested that we should examine radically in concert with our allies—not unilaterally as we did in 1981 when Defence Secretary Nott presented Cmnd. 8288 "The United Kingdom Defence Programme: The Way Forward"—how best as good, faithful members of NATO, determined to enhance the European contribution to our common Atlantic defence, we could make better use of our resources.
The strategic defence of our nation in nuclear terms must be sacrosanct, and we all understand that. The Opposition's amendment is plainly totally irresponsible. We cannot ignore the defence of the home base. The Government have improved Britain's air defence, with the Tornado F3 coming into service, improvements in our radar infrastructure and the fact that the Home Service defence force and Royal Auxiliary Air Force Regiment squadrons are exercising well.
Defence of the east Atlantic and English channel is crucial for NATO. We play a key part, with 70 per cent. of the naval forces in those areas coming from the Royal Navy. Unless these command areas are secure, how can western Europe be reinforced in time of tension or war? Without such certain reinforcement, how can a defence of western Europe be sustained?
We must also consider our overseas intervention force capability. The capability to intervene on the flanks with the AMF and Marines is crucial. Our Norwegian friends are particularly vulnerable, adjacent as they are in the north to the Soviets and with the Kola peninsula base complex right on their doorstep—the base from which the Soviets' strategic submarine force and northern fleet sail. Intervention forces are vital for Britain. We have repeatedly seen how necessary they are, most recently in 1982 in the south Atlantic conflict.
Last, but not least, there is our Brussels treaty commitment. Are we for ever and for aye to keep a tactical air force, plus 55,000 men on the continent of Europe, as though nothing has changed? It is not as though the foreign exchange costs are met by our German friends. Since 1980 they have been absolved of the offset requirement which was incumbent on them. Paradoxically on the autobahns one sees the Germans proceeding on their stately way in BMWs and Mercedes while the Americans and British, who are there to defend them, drive along in their old jalopies. The Germans spend about half as much as the British on defence as a proportion of GNP.
I am suggesting only that the balance between the offence and the defence is changing in favour of the defence with precision-guided weapons, as my hon. Friend the Member for Bexleyheath pointed out. The helicopter used against armoured vehicles is especially effective. We no longer have a conscript army as we did when we undertook the Brussels treaty commitment. There is a baggage train of families to maintain. One need only read the National Audit Office report "Costs and Financial Control of British Forces in Germany" to realise how expensive that baggage train is. Furthermore, in peace-time these forces are stationed in the wrong place, so it will be difficult for our forces in Germany to get to the right place in time of war.
My right hon. and hon. Friends in Government should not eschew a review. There is nothing wrong in re-examining strategy as international affairs develop. In fact, it is the responsible and right thing to do. If my right hon. and hon. Friends bite the bullet, forget what they may have said in answer to the Select Committee and conduct such a review, they will conclude that three divisions in Germany are too much for the United Kingdom. We should do rather more at sea and in the air and with our intervention forces. If we reduced our forces to a division west of the Rhine covering the clutch of Royal Air Force stations, Laarbruch, Bruggen and Wildenrath, that would be appropriate. We are not shirking our duty. We are one of the two European nuclear powers in the Alliance and shall continue to play a vital part.

Dr. John Reid: I am grateful for the opportunity to contribute to the debate, first, because I know that many hon. Members wish to speak, and, secondly, because I cannot claim the comprehensive and detailed knowledge shown in many speeches, like that of my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy).
However, I wish to raise once again the defence implications of the closure of the royal ordnance factories, especially, but not exclusively, that at Bishopton.The case has been put both inside and outside the House, most recently and with most passion last night by my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) who has a direct constituency interest.
I have an interest, first, as someone concerned with the defence and security of our nation, and, secondly, as someone concerned with the defence of my nation's employment. Thirdly, like other hon. Members, I am concerned to see that fair play is given to the taxpayer over

this. Finally, I have a particular interest as a Member of Parliament whose constituency depends on the steel industry, which, while it is less strategic in a defence sense than the ROFs, is strategic in an industrial sense, and is about to go through the same privatisation process as that faced by the royal ordnance factories. As a result of all these concerns, I find the Governments attitude towards defence in general, and the royal ordnance factories in particular, at best wrong in priorities, and at worst negligent of the national interest.
Over the past few years, the defence posture of the Government has been characterised by three main features. First, they have consistently shown a preference for nuclear weapons, even if it is at the expense of conventional forces—what Lord Carver referred to as their delusions of nuclear grandeur. Secondly, the Government have consistently preferred the encourage-ment of private gain even when, in the defence sector, it may be at the expense of national defence needs. Finally, they have shown an increasing preference for using the private market as the arbiter of national defence requirement when it should only, and can only, be determined by public discussion, public policy and public ownership.
The history of the Government is littered with examples of dereliction of duty, from the Westland affair to the sell-off of the royal dockyards. Nowhere is that dereliction more obvious, and nowhere is the concern felt more, than in Scotland, and nowhere is it more obvious than in the proposed closures at Bishopton and Patricroft. In yesterday's press we read even more horrifying reports that another 10 British Aerospace factories, including two royal ordnance factories, could be under threat. Thus, despite the assurances of Ministers at the time of privatisation, and despite all the promises and pledges of British Aerospace, Bishopton is to close.
The fact of closure is galling enough on its own, but the excuse for the closure makes it even more unacceptable and unpalatable. The reason given—the need to reduce so-called spare or surplus capacity—serves only to underline once more the necessity for public sector control of the royal ordnance factories. While they were in the public sector and operating in the broad national interest, the existence of spare capacity within the royal ordnance factories was not a handicap but a bonus. Reserve capacity was a requirement of good defence provision, not because of any sympathy or sentimentality towards the work force, but for the good, sound strategic defence reasons that a nation with insufficient means to increase defence production in an emergency is a nation incapable of responding to an emergency.
Nothing illustrated that fact better than the conflict in the Falklands. Whatever side we take in the debates on the merits of that war, there was surely something bizarre and demeaning about a maritime nation scouring the ferry and fishing fleets of Britain to muster an adequate naval force to send into action. Let us not forget that during that emergency the royal ordnance factory at Bishopton was working 24 hours a day, seven days a week to supply the additional requirements made necessary by that conflict.
With the ordnance factories, the Government are going down the same mistaken road they followed with the Falklands. It is not as if the Government were unaware of the danger to reserve capacity when they privatised the factories. The matter was specifically raised during the debate on the Second Reading of the Ordnance Factories


and Civil Services Bill, as far back as 16 January 1984, by my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) and others. The answer from the then Under-Secretary of State for Defence Procurement now looks quite staggering in its complacency. The Minister said, when he was challenged about the threat to reserve capacity:
There has been far too much unwarranted negativity".
Incidentally, he may not have been a good manager of the interest of the defence force, but he was an expert in the use of words. I was talking to some people from Bishopton and they are greatly relieved to know that they face not unemployment but "unwarranted negativity". The Minister said:
There has been far too much unwarranted negativity of this sort in discussion of the future of the ROFs. The right hon. Gentleman suggested that, once privatised, the ROFs could not be relied upon to supply the guns, fighting vehicles and ammunition they have supplied in the past; that in a time of tension or war we in the Ministry of Defence would look to the ROFs to step up production and suddenly find that they were not there. That is patently absurd. The ROFs are not beingsent anywhere."—[Official Report, 16January 1984; Vol. 52, c. 101.]
Well, I have news for Ministers. If they continue their present course, the next time we have an emergency or, in the words of the Minister, in a time of tension or war the Ministry of Defence looks to the ROFs—like Bishopton —they will not find them. They are going somewhere. In private hands, they are going down the tubes. Ministers cannot say that they were not forewarned. The tragedy is that normally forewarned is forearmed. In the case of this Government, forewarned means disarmed.
All this might be understandable if there had been fair treatment of the taxpayer, but the reality is that British Aerospace profited by untold millions because of undervaluation of land alone.
There are those who believe in a conspiracy theory of history. I am inclined to attribute what has happened not to that, but to another theory of history, beginning with a capital C. Whatever the reason for it, there should have been some humility from Ministers last night. Instead, the present Under-Secretary of State for Defence Procurement boasted of his prowess at property management. If that is a manifestation of expertise of property management by the Government, thank God the hon. Gentleman is not my estate agent.
Even at this late stage, the Government have a chance to restore the faith of workers at Bishopton and the other factories and to secure a good reserve capacity on a sound basis for the conventional support of our armed forces. They owe that duty not only to the work force of Bishopton, but to the safeguarding of the defence of this country.

Mr. Robert Hayward: I wish to deal with one or two points that relate particularly to my part of the country, but, initially, I shall comment on some of the contributions made so far. I find the contributions from hon. Members on the Opposition Back Benches far more honest than the contributions from hon. Members on the Opposition Front Bench. That is also true of the contribution from the Liberal Benches because, although the hon. and learned Member for Fife, North-East (Mr. Campbell), who is not in his seat at the moment, acknowledged that Trident would be in existence up to

1993, he did not say whether his party believed that that weapon would be used. His party leader has flatly refused to give an answer to that question when it has been put to him on a number of occasions on television. I therefore hope that, sooner or later, the Liberals will decide whether they would intend to use that weapon, as well as simply acknowledging its existence.
The hon. Member for Clackmannan (Mr. O'Neill) was challenged yesterday by my hon. Friend the Member for Bristol, East (Mr. Sayeed) about the level of expenditure to which the Labour party would commit itself. In reply, he said:
I confirm the first question. I shall reply to the second question in the course of my remarks."—[Official Report, 19 October 1988; Vol. 138, c. 917.]
I sat through his speech, and I have read it in the Official Report twice since then and can find no attempt to answer the question from my hon. Friend the Member for Bristol, East about the amount of GNP that the Labour party would commit. I listened with interest to see whether the hon. Member for Rhondda (Mr. Rogers) would touch on the matter today, but we still have no indication of approximately what proportion of GNP the Labour party intends to commit.
There may be a vast range of opinion among Opposition Members as to how that money should be spent. On the one hand, we heard it stated honestly by the hon. Member for Liverpool, Walton (Mr. Heffer) and, on the other hand, by the right hon. Member for Dudley, East (Dr. Gilbert), who made an excellent contribution to the debate, but Labour Front Bench Members have at no stage given an approximation of the amount of GNP that the Labour party would commit. They reel off all the problems saying, "We haven't got enough frigates or ammunition. We have problems with helicopters, the Army and the Air Force", but there is no indication as to whether they would be willing to put in more money, the same amount of money, or less money than the Government are currently doing. It is patently dishonest to list that catalogue of questions without attempting to deal with that general financial point.
I wish to mention two specific points about which there have already been a number of comments. I agree with the comments yesterday of my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) about the Territorial Army. I have been in correspondence with my hon. Friend the Under-Secretary about the Territorial Army because, although I appreciate the efforts made by the Ministry of Defence to recruit people into the Territorial Army as an extra reserve of expertise that we genuinely need, I am concerned about the demands being put on individuals who join the Territorial Army. I believe that the Minister has been advised about this matter. I do not expect a reply this evening, but I am willing to discuss the matter with him later.
The impression is given that people recruited into the Territorial Army are told that they will be required for a certain number of days. The minimum is 27 days, plus at least six weekends. From my conversations with a number of people involved in the Territorial Army, it has become clear to me that that is not the expectation of the Territorial Army. One of those people said to me yesterday, "If you don't do at least one weekend every month, then you are useless to the Territorial Army." It was clearly indicated to the person about whom I wrote to the Under-Secretary that he would be required for at least


16 weekends a year and that anything less than that would not be of any major benefit to the Territorial Army. I checked that with other people whom I know belong to the Territorial Army and they all gave that clear indication.
It is therefore hardly surprising that, if people are recruited into the Territorial Army, expecting to give six, seven or eight weekends a year, which is quite reasonable, and then find themselves confronted with substantial pressure from officers in the Territorial Army to attend for 16 or 20 weekends a year, they find that demand too great and therefore give up. That partly explains the high turnover that we are currently facing. If we resolve that problem, many people currently leaving the Territorial Army will be willing to stay and those who have left would rejoin.
The other comments that I wish to make relate to recent purchasing decisions. I particularly welcome the commitment made yesterday by the Secretary of State to the European fighter aircraft. The Under-Secretary will be well aware of the importance of that to Bristol, like the importance of the Tornado programme, in terms of engines, and we greatly appreciate that. Much comment has been made about helicopters. Like my hon. Friends the Members for Bexleyheath (Mr. Townsend), for Ruislip-Northwood (Mr. Wilkinson) and for Weston-super-Mare, I am somewhat confused because I do not believe that the Ministry of Defence knows what it wants to do with helicopters. As my hon. Friend the Member for Ruislip-Northwood said so lucidly, aspects of defence policy are changing and, therefore, the requirements for tanks, helicopters and other armaments.
I particularly welcome the decision announced during the summer recess regarding the RTM 322 engine and the EH101 helicopter. I hope that that will go a long way towards guaranteeing sales of that helicopter, not only in Europe, but in other parts of the world. Like other hon. Members, I am not sure that the Ministry of Defence has a clear understanding of what it wishes to do with helicopters. I am not a military expert. I am not able to say whether it should do X, Y or Z, but the lack of clarity of policy comes through over and over again in all the documents with which I have been confronted.
There is a time limit for speeches in this debate. I hope to give extra time to other hon. Members and will not, therefore, comment on the royal ordnance factories, about which a number of hon. Members have spoken. However, I hope that my comments are of help in respect of the Estimates, which I commend to the House.

Mr. Tony Benn: Many important questions have been raised in the debate, but the main one is, "Are we right to tax the British people by £19 billion, which is £441 per elector, for the purposes set out in the defence White Paper?"
There is some disagreement, which I have tried to follow, between the two Front Benches about the balance between conventional and nuclear forces. I find no great disagreement—indeed, a wide measure of agreement— between the two Front Benches about the level of defence spending. I listened very carefully and I too picked up the idea that the Opposition were saying that more money should be spent on defence. If this debate were confined to

that narrow question, it would not reflect the deeply held views of those people living in this country who believe, as I do, that the time has come for a much bolder, more imaginative and far-sighted review of Britain's defence and foreign policies.
I make no complaint, because we are not allowed to do so, that the amendment tabled by me and my hon. Friends has not been called for debate and will not be voted on, but that does not prevent me from referring to it. We said that our group of hon. Members
'declines to accept the Defence Estimates; believes that the Trident and new nuclear weapons programmes should be cancelled and the finance saved diverted to health, education and housing budgets; further calls for the removal of nuclear bases, weapons and facilities from Britain and an end to all participation in any nuclear programmes or systems; further resolves to reduce arms expenditure by £7 billion to the same level as other Western European countries and to divert the money saved to social spending and the arms manufacturing facilities released to socially useful production; and believes that reduction in arms spending will help to promote peace and the elimination of poverty and hunger throughout the world.'.
The thinking behind that was reflected clearly and overwhelmingly, not only at this year's Labour party conference, but at a succession of Labour party conferences. It has been put before the electorate and all of us in the House have been party to manifestos that have contained some or all of those proposals, but the real argument is about whether we should look again at the whole basis on which we propose to tax the British people.
The time has come to re-examine six assumptions upon which the foreign and defence policies of all Governments have been based since 1945. I say "all Governments" because, in a strange way, this is not in any sense a party matter. These assumptions are, first, that there is a Soviet military threat; secondly, that the United States, as the leader of the Western Alliance, has a world policy designed to uphold democracy and human rights all over the world; thirdly, that nuclear weapons make us safer; fourthly, that Britain has an independent deterrent; fifthly, that we can well afford to pay the cost of these arms; and finally, that our defence policy has protected and nourished democracy at home. All these assumptions need to be re-examined, for I believe that they are significantly false.
First, there is the issue of the Soviet military threat. Does anyone in this place seriously believe that, while Mr. Gorbachev is wrestling with long-overdue reforms in the Soviet Union, the Red Army is planning to land in Britain or to attack western Europe? I shall turn to what the public think about this because there are means of knowing that. The Soviet Union lost 20 million people during the second world war, and I am of a generation that will never forget that the liberty that we now enjoy was won in part by Russian blood in defence of their own territory in 1941. The purpose of the bombing of Hiroshima was not to bring the Japanese to their knees. I learnt when I was in Japan that the Japanese had offered to surrender weeks, if not months, before the bomb was dropped. It was dropped to warn the Russians.
The reason that Mr. Gorbachev is credible now is because—[Interruption] The hon. Member for Tayside, North (Mr. Walker) laughs, but he should read the record of the tribunal trying the Japanese leaders after the war in Tokyo. The Japanese offered through the Swiss to surrender months before the atomic bomb was dropped. The only condition that they laid was that Hirohito should remain. The hon. Gentleman should read the record


before doubting the accuracy of what I am saying. I discovered the fact only five years ago, but it is all on the record. The great theory that the bomb was used to save about 250,000 American lives is not true. Instead, it was used to tell the Soviet Union that we, the West, had an overwhelming weapon.
Mr. Gorbachev is credible because he says that he wants to cut defence expenditure to improve the standard of living of the Russian people.

Mr. Mans: Will the right hon. Gentleman give way?

Mr. Benn: I shall not give way to the hon. Gentleman because of the time limit.
The second argument is that the United States advocates and upholds democracy and civil rights throughout the world. I hope that I shall not be misunderstood when I say that America is an empire as Britain once was. America, in Vietnam, Cuba, Chile, Grenada, and in its relations with Franco and the Greek colonels, was not upholding democracy. Instead, it was protecting its world interests.
I was born in 1925, when about 20 per cent. of the world's population was governed through this Chamber. This place was the heart of the British empire, but we now live in a far-flung colony of the American empire. Those outside the House know this. The fact that we have no vote in the American presidential elections is a reminder of our colonial status.
The third argument—[Interruption.] Conservative Members laugh at what I am saying. They should remember that when we governed India the Indians had no say on how they were governed from this House. When Mr. Gandhi came to London in 1931, he was asked what he thought of civilisation in Britain. He said that he thought that it would be a good idea. That was a sign of the anti-colonial pressures of the time. The House must face facts.
The third argument is that nuclear weapons make us safer. After Chernobyl and the clear risk of accident, that is an unsupportable point of view. I say to my hon. Friends who contend that we must have the bomb because the Russians have it that when a Labour Prime Minister decided that we should build the bomb, the Russians did not have it. We decided to build nuclear weapons when the Soviet Union did not have them. That argument is a part of the history of the post-war years.
Fourthly, do we have an independent nuclear deterrent? We do not. We do not make nuclear weapons. The Americans supply them and refurbish them. Sir Frank Cooper was the permanent secretary at the Ministry of Defence and he must know more about these matters than anyone else. In the course of the Zircon film he said that we could not fire Polaris without the American satellite system. That was the secret, or the breaking of it, that made the Government wish to ban the film. Sir Frank made it clear that the Zircon satellite was an attempt to replace or supplement the American satellite system. The price that we paid for that, as we heard yesterday, was American control of the British security service and the situation that now prevails at GCHQ.
Fifthly, can we afford an independent nuclear deterrent? The answer is that we cannot. I am one of the few Members who sat in this place to listen to Aneurin Bevan's resignation speech. He resigned in 1951 over the high defence budget, which was at the expense of the

welfare state. The cost is massive because it involves 60 per cent. of our scientists and engineers. If we compare that with the average level of expenditure in Western Europe, £7 billion more is spent here than by our allies, who are equally keen to defend their countries.
The transfer of resources would enable us to meet pressing needs. Does anyone think that more people will die in Britain as a result of the Red Army landing here than as a result of AIDS, cancer or heart disease? The people know that the nation's health is a national interest and that it is being starved of resources in part for the purpose of maintaining the defence budget.
Finally, is democracy protected by the present system? It is not. Militarism destroys liberty or erodes it. Let us consider, for example, the role of James Angleton in "Spycatcher", who came to London and told MI5 that the then Labour Prime Minister was a Soviet agent. There was the former Secretary of State for Defence who ordered Cathy Massiter to tap the phones of CND. These examples tell us that the military state infringes domestic liberty. The war in Ireland is a most vivid example.
What do the public think? There are those who say, Mr. Benn, what you say may be right, but what do the public think?" I am not a believer in opinion polls but they are available for examination. The latest opinion poll findings tell us that only 9 per cent. of the British people think that a Soviet attack is likely. When it comes to causes of war, 58 per cent. of the British people think that. the cause may be nuclear attack by accident. It seems that 6 per cent. think that the likely responsibility for such a war would rest with the Soviet Union, while 27 per cent. think that it would be with the United States. These are not hard Left arguments. I am referring to the figures that have been published by Dr. Gallup, who is no particular friend of mine.
It appears that 41 per cent. of the British people have confidence in the world role of the Soviet Union while only 24 per cent. have confidence in the United States. When it comes to desire for world domination, 17 per cent. consider that to be the main interest of the Soviet Union and 32 per cent. think it to be the main interest of the United States. When asked about credit for the disarmament agreement—the INF—only 10 per cent. think that the United States should get the major credit——

Madam Deputy Speaker (Miss Betty Boothroyd): Order. The right hon. Member has precisely 20 seconds left.

Mr. Benn: I appreciate the time constraint that is upon us, Madam Deputy Speaker, and I shall draw my remarks to a conclusion.
For 40 years the cold war has dominated the politics and economics of the House and the country. We have hope in 1988, and it must be our task to seize the possibility of looking to the 1990s and the next century so that we can reallocate the money and the skills that are wasted on weapons of mass destruction to create the means of life for those who are condemned to die because resources are being wasted instead of being made available to meet their needs.
For these reasons I shall be voting against the Defence Estimates tonight. I believe that they represent a burden that the British people should not pay, and a burden that world events make it unnecessary for us to pay.

Sir Hector Monro: If there were time, I should take great pleasure in shooting down in flames the right hon. Member for Chesterfield (Mr. Benn) point by point. Will he never learn? Three general elections have not shown him what the British public want. He is not the only person to be out of step with the British nation. That highlights how fortunate we are to have my right hon. Friend the Secretary of State for Defence and his ministerial colleagues, who are pursuing sensible defence policies, cutting out waste and maintaining security for Britain now and in future.
I support the efforts that my right hon. Friend the Secretary of State is making to persuade the Treasury, and perhaps the Star Chamber, to maintain our defence spending, or perhaps to increase it. We must be careful about expenditure, but defence spending is falling behind other areas of spending and there is much to do if we are to support the United States and NATO and look after our own responsibilities.
In exchange for this support for the Secretary of State I ask him to make one or two small switches of emphasis. We should move marginally away from our hi-tech weapons, some of which are of doubtful effectiveness, towards personnel. Recruiting will be tight in the 1990s; we must retain what we have; we shall have to compete in a difficult market for new recruits. Pay is not the essential aspect. Conditions of service and fringe benefits are. We must examine them carefully and help our forces in every way. Housing is always a prominent issue among service men. They all want to own their houses, but need to know where and how they can do that on mortgages. Our service men frequently have to move, and hence their children must frequently change schools. They need support for that. All these things are terribly important. We always hear—rightly—from Ministers about how they are trying to help with the simplification of service life, but that always seems to be about to happen tomorrow. When will it happen today?
The second tiny switch of emphasis has to do with the value for money that we obtain from our reserves. They are extremely effective and cost effective, and a small change in the amount of money available to them would be highly beneficial. Many hon. Members have spoken about the TA, the RNVR and the Royal Auxiliary Air Force and the Home Service Force, together with the cadets in those forces. They deserve excellent equipment, the best facilities and a proper promotion structure in each service. Too often experienced officers in their forties find they have nowhere to go.
The great initiative of recent months under Brigadier Tommy Macpherson to highlight to the nation the importance of our reserves and their value to the MOD is highly commendable, and I hope that it will be successful with our employers, who have a significant part to play in the promotion of our reserves.
I am delighted that my hon. Friend the Under-Secretary of State for the Armed Forces is coming to the south of Scotland next month to talk about low flying, which is an important issue there. I am sure that he will strike the right balance and explain how essential it is for Royal Air Force pilots to maintain a significant level of low flying. The hon. and learned Member for Fife, North-East (Mr. Campbell) mentioned how important it is to maintain the search and rescue facility at Leuchars for

central Scotland. It would be inconceivable if 22 squadron were removed from Leuchars or 202 squadron from Lossiemouth. I am quite sure that the distinguished Air Officer (Scotland and Northern Ireland), Air Vice-Marshal David Brook, is fighting his corner hard over what is an important issue for Scotland—not only for the services but for the community at large. My hon. Friend the Member for Tayside, North (Mr. Walker) and others—and I—have all paid tribute to the search and rescue service.
Turning to Royal Ordnance, I am as concerned as anyone else about the closure of Bishopton, because of the large number of lost jobs that will ensue in an area of high unemployment. I want to discuss the knock-on or knock-off effect that that will have on the Royal Ordnance factory at Powfoot in my constituency, which is managed effectively and efficiently by ICI Nobel. It has a full order book and is the only factory in the United Kingdom manufacturing tubular propellant for all British small arms ammunition. It was the subject of a five-year agreement between RO and the MOD. I stress that it is the only indigenous provider of the propellant that we require for our small arms ammunition.
In 1985 Royal Ordnance gave ICI notice to quit. I went to see my right hon. Friend the Member for Henley (Mr. Heseltine), then Secretary of State for Defence, and he gladly gave me a stay of execution into the 1990s, which was good news. This year, however, Royal Ordnance said that it would remove the production line in 1990 to Bishopton. Then, a few weeks ago, came the announcement that Bishopton was to close. Where is this production line to be taken now? It is quite wrong that we should buy the propellant that we need from America or the continent—for example, from Czechoslovakia, where it is manufactured with Communist Government subsidy —given that it is a crucial powder for our ammunition. Will the Minister examine the matter, not in terms of Royal Ordnance's rights as a company, but in the light of the factory's being the only supplier of this gunpowder in this country. Surely we cannot go into the 1990s without it. I hope for a response from the Minister as soon as possible.
A further knock-off effect will be that if we do not have Powfoot we shall not need to make nitrocellulose at Dumfries, which will mean a further loss of jobs. Royal Ordnance must not lose sight of its reponsiblility to the community as well as to the MOD and its shareholders. I am not climbing on the bandwagon of those who complain about property development. RO is jolly lucky if it can sell Powfoot or give it away after it has been sterilised following years and years of high explosives production.
I am delighted with the firm policies developed by my right hon. Friend for this country. He is on the right lines and has my entire support. I hope that he will look into support for personnel in the services, at their conditions of service, and will give me a favourable reply on what is to become of the unique production line in my constituency which now seems severely threatened and stands to lose 140 jobs. I hope that my right hon. Friend will be able to reverse that decision.

Miss Joan Lestor: The hon. Member for Dumfries (Sir H. Monro) nicely opened the way for me to follow him by discussing the Royal Ordnance factories.
Today, a lobby of working men and women from Bishopton and Patricroft in my constituency was here. They came to protest at the closure of the factory, pointing out the effect that the loss of their jobs would have on communities that already suffer, in many cases, from unemployment that is well above the national average.
The workers also asked, and I repeat their request, for an inquiry by the Public Accounts Committee into the background of the privatisation of Royal Ordnance and what has flowed from that. If the speculation in The Independent and the fears that were first expressed in the MOD's report about the sale of the Royal Ordnance factories, which was commented on by the Comptroller and Auditor General, is all wrong, the Government have nothing to fear. They will hold a public inquiry, we shall have egg on our faces and they will come out of it with no more stains on their rather spotty characters than they have now. I do not understand the resistance to such an inquiry. The disclosures since the leak during the week of the Labour party conference, where I first picked up the news on the television, have given people cause for concern about what is happening.
My concern about the background to the privatisation started some time ago. When I took over the Eccles constituency from Lewis Carter-Jones, he handed me a file on the subject. I also raised the matter with the Leader of the House. who was standing in for the Prime Minister on 11 February. I asked him to put pressure on his colleagues in the Ministry of Defence
to answer the criticisms of the Comptroller and Auditor General about the privatisation of the Royal Ordnance Factory
because the Minister had refused to answer them. I pointed out the cheapness of the way in which the deal was carried out, and the fact that
dividends were waived to make the company more attractive and … the delay in the transfer of pension rights and redundancy pay made this whole operation exceedingly expensive.
The Leader of the House replied:
I think that the hon. Lady misses the important point. The important point is that there were difficulties in the armament procurement industry. That industry will be much better under privatisation than it ever would under state control."—[Official Report, 11 February 1988; Vol. 127, c. 498.]
A few months later we were told, as the hon. Member for Dumfries stressed, that two factories—others have already closed—were to close. In particular, that at Patricroft is to be closed. There are grave doubts surrounding the background to this matter and the way in which the Royal Ordnance factories were sold off to British Aerospace.
Earlier, one of my hon. Friends mentioned the soothing noises that were made by the Ministry of Defence. I have a letter dated February 1987 from Lord Trefgarne to Lewis Carter-Jones stating:
Whilst your constituents may be concerned about the introduction of competition into the procurement of ammunition, Royal Ordnance with its long history of producing these stores will stand a good chance of winning the orders for our further requirements.
Lord Trefgarne went on to comment on how well Royal Ordnance was already doing. Soothing noises were made, and I can refer to another letter dated 30 November, which made similar soothing noises.
When the leak finally came and the unions took up the matter, they were told that production at the closed Royal Ordnance factories would go to other Royal Ordnance factories. However, we now know that the company is

looking both nationally and internationally for other plants. Three joint ventures are planned. I should like an assurance that none of the work from Patricroft or Bishopton will go to the planned joint ventures in Chile, Brazil and Kentucky. If we are to have an armaments industry, and if we are to supply our defence forces, it appears, if those reports are true, that we shall be moving production to non-NATO countries where there is no agreed quality assurance in respect of propellant and ammunition standards. If we are saying—and of course we are not—that an arms industry is no longer needed in this country, the talents of the highly skilled men and women who have been employed in it should be applied elsewhere. There is plenty of social and other need in the community which those skills could be used to meet. But no, we now find that those goods are to be bought elsewhere.
My constituency has an above average level of unemployment. It has been starved of investment and of growth, and over the years its traditional industries have declined. We had a spark of hope when £160 million was invested in the Trafford park development scheme, which begins just 100 yards from the Royal Ordnance factory that is to be closed with the loss of more than 1,000 jobs. It makes a nonsense of putting money into a development scheme in the hope of producing more jobs when at the same time the door is closed on more than 1,000 jobs nearby, in a situation that has very shady surroundings.
Skills there are to be left lying dormant. The knock-on effect on the community will be colossal in respect of both employment and local trading losses. Families will be plummeted into poverty. More and more youngsters in that area are being left without hope. They have looked to Patricroft and other places for some form of apprentice-ship and for hope for the future. As was said by one of my hon. Friends yesterday in respect of Bishopton, the Royal Ordnance factories have become family concerns employing fathers and sons, and so on. Already large numbers of young people in my constituency have been left without hope for the future.
We shall soon hear Conservative Members saying that those unemployed could work if they wanted to do so and that they are not getting on their bikes looking for jobs. The truth is that there is no more work available in my area. If that industry had declined, we would want to use the skills of those people in some other way. However, that is not the case, because that production is being sent elsewhere. People are being denied the right to work, and we are robbing our defence industry of assured equipment quality.
As far as we can tell, British Aerospace is making a financial killing by selling out the jobs of my constituents. That is how we see it, and that is how the people of Eccles see it. That is how it is viewed by the people in all the areas affected. It is nonsense for the Government to shrug it off. Every Conservative Member who has spoken, with the exception of the hon. Member for Dumfries, has said, "It is a pity about the unemployment, but…" There should be no "but" about unemployment. I say again to the Minister that if the stories about the background to this development are wrong, if we are wrong, and if the unions are wrong, the Government have nothing to fear from an inquiry, because we shall be the ones made to look silly and not them. I urge the Government to think again.

Mr. Neil Thorne: I shall not attempt to go down the path followed by the hon. Member for Eccles (Miss Lestor) in respect of the Royal Ordnance factories, particularly with reference to that in her own constituency, except to say that it is vital that a large number of alternative industries are available in towns so that they are not dependent on one particular type. That is certainly the case in Eccles. Corby is a marvellous example of a town that was wholly dependent on one industry, but which is no longer so dependent—and it is now a boom town. I hope that the hon. Lady's constituents will find that in the not-too-distant future other employment opportunities are made available to those who are dedicated and who wish to use their skills. Therefore, I am not as pessimistic as the hon. Member for Eccles.
I thank my hon. Friend the Minister of State for his mention of the work and assistance given by the Royal Army Medical Corps following the Dharan earthquake. The services provide important assistance in emergencies, which is often not appreciated or realised by the agencies that demand that we provide more aid. We have those forces and resources readily available in many parts of the world. It is important that we should be able to provide assistance at short notice. That is what happened in Dharan, and I am delighted that our services did so well there. Complete surgical teams were promptly ferried out from Hong Kong, supplemented by experts from this country, and a permanent base was established. I hope to visit Dharan next month, when, I understand, the services there will be running down because they are to be relocated. Had the earthquake occurred six months later, it would have been much more difficult to provide assistance. I hope that in reviewing the services that the Army was able to provide my hon. Friend will seek to ensure that there is some continuity and that those people who have settled near Dharan will not be left without medical cover of the kind upon which they have come to rely for such a long time, when the British Army moves its Gurkha recruitment base, as it plans to do in the next few weeks.
Under the same heading, we must also give credit to the work of the Royal Navy after the recent hurricane in Jamaica. It was able to send in a patrol vessel and to provide substantial assistance at short notice. Such help does not appear in any acknowledgement of the aid that we provide. A number of other countries provide more aid in pounds, shillings and pence, but they do not have on hand the type of services that we can provide in emergencies.
The second point I wish to address concerns our reserve forces. Other hon. Members have mentioned the extremely good value for money that our reserves represent. I recall that the last time a calculation was made at my request the cost of providing a reserve soldier was only 10 per cent. of that of providing a regular soldier because of the extra provision made for accommodation, pensions and education.
Therefore, reserve soldiers represent extremely good value for money. It is not possible for them to take over completly because a minimum number of regular soldiers must always be provided to fulfil the role of the regular forces. All through our history, over many hundreds of years, the reserve forces have had an important role to play. However, because of our NATO commitments, we

have come to expect a very great deal from them. We have been using them as a trade-off because of the lack of national service, and that has put an enormous strain on the lives of those part-time soldiers, sailors and, in some cases, airmen. That is one of the main reasons why we are having difficulty in retaining recruits.
Plenty of young men and women are able and willing to offer their services, but often they sadly find that the commitment does not fit in with their domestic lives. We must do some serious thinking about that, because those young people are vital if we are to ensure that we need not call upon a national service, which most regular forces would regret.
One aspect to which we do not pay enough attention is the social side, particularly for junior ranks. The training required is often onerous, because the soldiers and their commanders are of course anxious that their service should reach virtually "regular" quality. I well understand that the commanders want to achieve that standard, but it often means that families are neglected. We must try to make up for that by ensuring that there are extremely good clubs for junior ranks, particularly for the benefit of their wives and families. In my view, the reserve forces should have the best club in any neighbourhood, without exception. I think we should then find that many who have passed through their service would wish to contribute by coming back to help with the facilities.
I know that time is limited and that many others wish to speak, so I shall not detain the House for long, but I should like to raise one or two other matters. The first concerns helicopters. I know that 25 utility helicopters have been ordered. Continuity is important to the helicopter industry if it is to exist. The helicopters were originally due to start being delivered in the early 1990s, but I understand that delivery may now be put back to the mid-1990s. If that happens there will be further employment repercussions, for without continuity it is impossible to keep together the skilled work forces that are so essential. I hope that my hon. Friend the Under-Secretary will have something to say about that later.
There is also the question of the offset for the Boeing AWACS deal that was done in 1986. Let me refresh my hon. Friend's memory. It was agreed that Boeing would provide new expenditure of 130 per cent. of the cost of the AWACS, which would have meant a total expenditure in this country of £1,300 million. I should be grateful if my hon. Friend would say a little about that. I should like to be reassured that things are going well and that progress will not be too prolonged.
I congratulate the hon. Member for Stockton, North (Mr. Cook) on joining the Opposition Front Bench team, and thank him for the kind remarks that he made about me yesterday in connection with the armed forces parliamentary scheme. I am delighted that everything in which he has been involved has been going so well. It is possible, of course, that his appointment had something to do with it; nevertheless, it is very good news. I hope that the scheme will be expanded, and that other hon. Members on both sides of the House will have an opportunity to participate when it is launched officially later in the year.
In this connection I am most grateful to my hon. Friend the Parliamentary Under-Secretary of State for all his help and encouragement.

Mr. Harry Cohen: The glossy cover for the Defence Estimates, with three nuclear submarines in a wonderful setting, shows how much the Government romanticise and glorify the nuclear arms race. Nuclear weapons are the Governments steroid fix. They would fail any drug test because they are addicted to the magic mushroom—the nuclear one. The Prime Minister wants every new one that is going: Trident, battlefield nuclear artillery, the Army tactical missile system, short-range nukes to follow on from Lance, the replacement of free-fall bombs—TASM—nuclear depth charges, submarine-launched cruise missiles, more United States F111 hydrogen bombers, and the air-launched cruise missile to follow. The Prime Minister calls it modernisation, but it is cheating on the spirit of the INF agreement. She is rearming when the people of the world want disarmament.
This new arms race, embodied in the Defence Estimates, goes against the grain of Britain's and the world's interests. A good deal of environmental pollution is nuclear. Chernobyl and Sellafield are examples of the abysmal record, and we can now add another example, that of Fernald in Cincinnati, Ohio, where thousands of tonnes of nuclear waste have been released into the atmosphere and the water supply in the production of material for nuclear weapons. The Government are at present sitting on a report of significantly higher than normal leukaemia and other cancer clusters at Aldermaston and Burghfield.
Tackling the poverty and famine that so scar the face and conscience of the world is not compatible with massive arms expenditure. The economies of the super-powers are overburdened. What perestroika is all about is to get money to the people, the consumers, in the Soviet Union, but that cannot be done while there is such high spending on defence. The United States is one of the biggest debtor nations of the world, and its defence commitments contribute to that.
There is also the serious danger of nuclear proliferation. The Governments flying of plutonium to the Japanese is a scandal if ever there was one. I was on a delegation led by my hon. Friend the Member for Islington, North (Mr. Corbyn) to see the Iraqi ambassador about Iraq's use of chemical weapons. He virtually said to us, "If we had nuclear weapons, we would use them in defence of our country. You in Britain have them; why shouldn't we?" Government practice is encouraging that sort of attitude. Instead of getting out of the nuclear arms race and encouraging others to do so, we are moving more and more to politically usable nuclear weapons.
The MOD is on record as saying that nuclear weapons can be used
to demonstrate that NATO has the capability and will to use its nuclear weapons in a deliberate, politically controlled way … (with the objective of restoring deterrence by inducing the aggressor to make the decision to terminate his aggression and withdraw)".
Presumably that would justify the use of nuclear weapons against Argentina in a future Falklands conflict.
The new nuke-speak refers to the "single shot" or "selective strike". The Prime Minister is aiming towards another Hiroshima, or perhaps a future attack against a troublesome Third world nation. That would truly be a third world war. The Government even contemplate the use of Trident—the equivalent of 2,000 Hiroshimas, a global orgy of world death including our own.
Trident is not independent: its missiles are targeted and serviced by the United States and are under NATO—in reality, US—control. It is a potential first strike weapon. Trident's use, and our obliteration as a consequence, is in reality in the hands of the United States President, perhaps even Dan Quayle, who, in his inexperience, may be tempted to use it in the European theatre while he stays in his bunker avoiding the draft, so to speak.
The Foreign Secretary talks of Trident being an irreducible minimum deterrent, but when he is asked to define "irreducible", he says that it relates to what the environment has to face. I will tell him what the environment has to face. It is the super-powers reducing their nuclear weapons. So why are the Government going for the massive increase that Trident is all about? They even refuse to put it on the negotiating table. The Government's stance is:
no further reductions in nuclear weapons in Europe until imbalance of conventional forces has been removed and a global ban on chemical weapons achieved.
What a foolish set of conditions. There should be simultaneous negotiations on all three aspects. That condition amounts to a block on further nuclear disarmament.
In their evidence to the Select Committee on Foreign Affairs the Government talk of
the need for residual force entitlements to rcmain at, or near, current NATO levels.
Again, that is the minimum necessary. It says that after reductions residual ceilings will have to be near or at the current NATO force levels. The Ministry of Defence is blocking serious negotiated reductions by saying that it will not make any. That is the MOD's perpetual bleat, despite the opportunity for substantial reductions on both sides. One of those opportunities is in conventional forces, where there is a great opportunity for reductions.
A West German paper entitled "Security for Europe" talks about a phased reduction in tanks coming down from about 80,000 to 10,000 on each side by the year 2000. That would be an asymmetrical phased reduction. Front-line strike aircraft and helicopter gunships would be cut to an equal ceiling of 500 on each side. Then it says that we should reduce the armed forces and their associated armaments by exchanging military data, by mutual at-site inspections in the process of verification, and by reducing the number of troops and officers in Europe by half, with either totally demilitarised zones or at least partially demilitarised zones where the most offensive and dangerous weapons are taken out. It also talks of confidence-building measures so that we set up a European military danger reduction centre of the sort that was agreed between the United States and the Soviet Union in September 1987. We could perhaps set up international fax hot lines. One has been in existence between the United States and the Soviet Union since 1963.
In addition, there need to be measures to avoid a technological arms race. That is the basis for negotiation which should be actively pursued by the Government to bring down enormously our defence costs and those of the world.
In conclusion, I recommend a pamphlet produced by Labour Action for Peace entitled "Welfare or Warfare? Cutting the cost of militarism". It talks about how the cost has increased 28 per cent. in real terms under the Government. Since the war, £240,000 million has been spent on war preparations. It describes how we


consistently spend more than our industrial competitors and how our military commitments overseas plunge us into debt on our balance of payments. It also points out that, if we cut defence spending to the level of Japan or Germany or other of our competitors in western Europe, £6,000 million a year would be released for spending on civilian industries, health, education and other welfare services.
That is the direction in which we should be going. It is time that we turned back those high defence costs and made Britain, Europe and the world a safer place.

Mr. Edward Leigh: The hon. Member for Leyton (Mr. Cohen) is a likeable chap but his speech was absurd. My right hon. Friend the Prime Minister does not want any weapon systems that are not strictly necessary for defence. She does not want to use nuclear weapons, but it is her public pronouncement that she would use them if necessary which prevents not just nuclear war but all war. That is a fact and the hon. Gentleman cannot escape it.
This debate has been characterised by some interesting speeches from the Labour Back Benches. It has also been characterised by a speech from the hon. Member for Clackmannan (Mr. O'Neill), notable for what it did not say rather than for what it did.
The right hon. Member for Chesterfleld (Mr. Benn) is an honest man. He represents the "peace at any price" movement in the Labour party, but at least he is honest. The right hon. Member for Dudley, East (Dr. Gilbert) is honest. He represents the "peace from strength" movement in the Labour party, although I question whether it is still a movement. I suspect that it is a dwindling band of people.
But the hon. Member for Clackmannan, who speaks on behalf of the Labour party, seems to represent the "peace at any price unless it might lose us the next general election" movement within the Labour party. He spoke for 50 minutes. His speech was masterly. He dealt with a number of interesting issues which were not central to what the House should be talking about. He did not touch at all upon nuclear strategy, on which I am sure the House would have wanted to hear his views. When I pressed him all he said was:
I am whole-heartedly behind the present moves to reduce the threat of nuclear war on the continent and throughout the world."—[Official Report, 19 October 1988; Vol. 138, c. 918.]
What does that mean? It means nothing and it was designed to mean nothing. That statement, which I enticed, was the only statement made by the hon. Gentleman on nuclear policy. It could have been made by the right hon. Member for Chesterfield or my right hon. Friend the Prime Minister. It is meaningless.
The hon. Member for Lewisham, Deptford (Ms. Ruddock) also made an interesting speech. We all know that she used to lead the Campaign for Nuclear Disarmament. Her speech was also like the dog that did not bark in the night. Is she ratting on her unilateralism? Why did she not mention it? She is rather like a person who has wandered into a desert, sees a mirage in the distance and rushes helter-skelter for it. The desert that she has wandered into is the unilateralism that she espouses and which she realises, as a shrewd and ambitious politician, is

losing the Labour party election after election. The mirage to which she and the whole Labour party are rushing towards is the belief that recent developments in the Soviet Union, glasnost and perestroika—those expressions that have a cosy Slavic ring about them—have fundamentally changed the ball game when it comes to defence policy.
When I listen to the Labour party I am reminded of a story that I was told recently in Lincoln cathedral of the rabbi and the poor man. The poor man goes to the rabbi and says, "Rabbi, rabbi, how can I live in dignity with eight children in two rooms?" The rabbi says, "Go out and bring your cow in from the field and you will live with dignity." He does it and things get worse. He goes to the rabbi and the rabbi tells him to bring in his chickens. Things get worse. The rabbi tells him to bring in his pig. Things get even worse. The poor man goes to the rabbi and tells him, "Things are desperate." The rabbi tells him, "Go back to your home. Take away the cow, chickens and the pig." The poor man comes back and says, "Yes, rabbi, things are perfect. I can live in peace and dignity."
Why is that relevant? It is simply because, like the poor man in that parable, the Labour party in the shape of Ernie Bevin in 1948 said that such had been the violations of Yalta by the Soviet Union that we had to form NATO. For 40 years violation after violation is heaped upon Europe. The Prague spring, Hungary—[Interruption.] It is no good Labour Members jeering. This is what lies behind the need for a strong defence policy. Finally, those developments culminated in the invasion of Afghanistan and the unilateral deployment of SS 20 missiles without provocation targeted on western cities. Those missiles are now being withdrawn, thanks to the wise statesmanship of my right hon. Friend the Prime Minister and President Reagan. Incidentally, the hon. Member for Deptford made an extraordinary comment on that yesterday.
The Soviet Union has withdrawn from Afghanistan —no thanks to Mr. Gorbachev but thanks to the brave resistance of the Mujahidin, resourced by western nations. Just because those two developments have taken place. like the poor man in that parable the Labour party says that all is now sweetness and light.
But what is the true test of detente? What is the true test of what is happening in the Soviet Union and Eastern Europe? Has the Berlin wall been taken down? Is there freedom in Prague? We were reminded only yesterday of current troop strengths. The internationally respected International Institute for Strategic Studies reminded us that the Soviet Union is not reducing its conventional forces in Europe to produce the reasonable sufficiency that is required for peace. It reminded us that NATO countries have 22,000 tanks and the Warsaw Pact 53,000. In terms of artillery, NATO has 10,000 and the Warsaw Pact 35,000. NATO has 4,000 combat aircraft, whereas the Warsaw Pact has 7,000. NATO has 864 helicopters, whereas the Warsaw Pact has 1,165.
The recent developments in the Soviet Union have changed nothing. In many ways, things are worse than they were in the late 1970s. I say to my right hon. and hon. Friends on the Treasury Bench, and in particular to my right hon. Friends at the Treasury, that we would give the wrong message in the current climate, and during this delicate stage as the presidential election in the United States moves towards its climax, if there were to be a significant cut in the Defence Estimates and if they did not


keep pace with inflation. We have to keep on the plateau that was decreed when we formulated our NATO commitments.
My hon. Friends the Members for Weston-super-Mare (Mr. Wiggin) and for Northampton, North (Mr. Marlow) dealt with the tank issue. I do not believe that they were entirely serious when they said that the Chieftain tank should not be replaced. That would be absurd. By the year 2010 the Chieftain tank will be 50 years old. There has to be a replacement for it. I hope that my right hon. and hon. Friends on the Treasury Bench will bear in mind the serious logistical and manpower problems that would arise if a British tank were not ordered. It is unthinkable that a decision could be taken not to order a British tank.
I hope also that my right hon. and hon. Friends will deal with the problems that would arise if undue pressure were to be put on certain companies not to provide a British gun. The negotiations are at a delicate stage. I suspect that I am preaching to the converted on the Treasury Bench, but British companies would be very seriously affected if the policy were to change, particularly with regard to exports to the middle east.
As for land disposal, an editorial in The Daily Telegraph this week pointed out that the Ministry of Defence is the third largest landowner in the country. It has about 3,000 sites. The Ministry needs to do much more about realising its precious assets. If necessary, a Minister must concentrate full-time on realising them. I have seen an example of the non-realisation of assets in my constituency at Hemswell. The saga has continued for about 10 years. Hemswell was abandoned by the Royal Air Force. Since then, very little has been done. Luckily, progress is now being made, thanks to free enterprise. RAF Binbrook, which the RAF is vacating this year, will provide the opportunity for a £100 million development of private housing. I hope that my right hon. and hon. Friends will grasp the opportunities that have been provided.
To return to my theme of peace through strength, if the viper withdraws its fangs the wise man does not lay down his stick. He does not throw it to the ground, as the right hon. Member for Chesterfield would do. Furthermore, he does not do what the leader of the Labour party wants to do—throw it to the ground and multilaterally offer part of it to the viper in return for one fang. Instead, the wise man adopts the statesmenship that has been followed by the President of the United States and the Prime Minister—to talk peace and modernise defences. As long as we have that, I shall have confidence in the Estimates and in the Treasury Bench.

Mr. Bob Cryer: The argument that we should negotiate from strength is very dangerous. It might be mirrored exactly by those in the Soviet Union who hold the same daft ideas as have been put forward today. They might argue, "We need more nuclear weapons in order to negotiate with Thatcher and her cronies."
The Tories are talking about a totally immoral and un-Christian threat of mass extermination. They rise to their feet when there are terrorist outrages in Northern Ireland and decry the loss of human life and limb. They do it time after time, yet tonight they are talking about the use of weapons that would destroy millions of men, women and children. The hon. Member for Gainsborough and

Horncastle (Mr. Leigh) confirmed that the Prime Minister is prepared to use nuclear weapons for international policy purposes. That is outrageous. The argument is that we should never use them but that they are there. If, however, nuclear weapons are to be a deterrent, there must be an intention to use them whenever the chiefs of staff and the Prime Minister decide that it is right to do so. The threat of mass extermination, involving the possession and deployment of nuclear weapons, is immoral.
The Minister failed earlier to answer the question that I put to him. If, as the Government claim, Polaris has kept the peace, why are we embarking on a replacement for it that will be between four and 10 times more powerful, depending on the number of missiles to be used? The expenditure on it is massive. Prestige—nothing else—is involved. The Government are spending £11 billion on Trident, yet some of their poodles in Bradford are to sack 9,000 workers just to save £3 million or £4 million. What are the correct priorities—to preserve jobs and services in Bradford or to spend £11 billion on producing an even more effective means of mass extermination?
The House welcomed the INF agreement and the legislation that provides immunity for Soviet inspectors to observe the reduction in nuclear forces. The Opposition welcomed it with enthusiasm, but modernisation is a euphemism for cheating. The Government are going behind the back of the INF agreement in order to increase and develop nuclear weapons. They were not involved in the INF agreement, apart from a few telephone calls between the Prime Minister and the President of the United States and a cup of tea with the bold and courageous leader, Mr. Gorbachev, on the tarmac at Brize Norton. However, by their foolish actions, the Government are potentially prejudicing a very important beginning; it affects only a tiny proportion of the nuclear weapons that are held in stockpiles throughout the world —about 3 or 4 per cent.
How does the Minister reconcile massive expenditure on nuclear weapons with our signature on the United Nations nuclear non-proliferation treaty? We are told that treaties involve a solemn obligation. We signed that treaty, as did 133 non-nuclear nations. They signed it in good faith, on the basis that they would not manufacture or deploy nuclear weapons. If that is good enough for them, why does the United Kingdom always have to have nuclear weapons?
What will the United Kingdom say to nations that have rejected nuclear weapons—"It is all right for us to have them but it is not all right for you to have them."? That argument can be turned around. Non-nuclear nations could say, "If the United Kingdom feels that it is necessary to have nuclear weapons for defence, why should we not do the same and break the treaty?" They have said in two review conferences that the nuclear signatories—the United Kingdom, the Soviet: Union and the United States —are breaking the treaty. The Soviet Union and the United States, however, are following clause 6 of the treaty which commits signatories which are nuclear powers to negotiate in good faith to remove nuclear weapons. The only nuclear signatory to the United Nations nuclear non-proliferation treaty which is in breach of it is the United Kingdom
Do the Government care about their international obligations or do they not? When will they satisfy the 133


non-nuclear nations that they will follow clause 6 and, more important, by their actions persuade the non-nuclear nations not to follow our terrible example and go nuclear?

Mr. Rhodri Morgan: One way in which the United Kingdom could meet its obligations is for it to include in the Estimates an item for arms conversion. The matter should not divide the House. Whether arms reduction is achieved through multilateralism or unilateralism, it must be possible that, by the early 1990s, Britain will have dispensed with Trident and other nuclear warheads. I refer to warheads and other parts manufactured in such places as the atomic weapons establishment in Cardiff.
There should be an item in the Estimates to prepare nuclear establishments such as Aldermaston, Burghfield and Cardiff, which are heavily involved in the manufacture of the British nuclear deterrent, for the possibility of converting to civilian production. They have done it before. Space age materials such as uranium, beryllium, zirconium and titanium are of great value to the hospital service and for specialised machinery used elsewhere.

Madam Deputy Speaker: Order. This is becoming a speech, not an intervention.

Mr. Cryer: I am most grateful to my hon. Friend, who has made a valuable point. If the Government intend to support moves towards peace, they should provide in the Estimates for some skills to be transferred. Although only a nominal number of people may be involved at first, it is an important principle. The Government could usefully embark on retraining for peace as a demonstration of what they often proclaim, although their actions indicate the reverse.
Why can other NATO countries be non-nuclear? The Prime Minister went to Canada and spoke to the Canadian Prime Minister. Did she rebuke him because the Canadians do not allow nuclear weapons on their soil? They will not, for example, have nuclear-powered cruise missiles. The only time that there were cruise missiles on Canadian soil, there was an absolute embargo on their use for nuclear purposes. They were flight-tested only as a contribution to NATO. The Canadians' stance remains that they will not have nuclear weapons on their soil.
Canada is not the only member of NATO. The Government have an opportunity to push NATO away from what is called "flexible response", but which involves first use of nuclear weapons. Roughly speaking, the idea is that if the Soviets book Sealink and the rest to come here to take us over and we fail to hold them with conventional forces, we should use nuclear weapons and effectively blow up the world.
NATO's first use of nuclear weapons should be stopped. We should move back from the brink, not endorse the idea of first use, which is potentially disastrous.
If those who believe in nuclear weapons are so frightened of the Soviet Union—their leader has described Mr. Gorbachev as bold and courageous—they should take a suicide pill, not support mass extermination. Nobody will come to the House saying that we will have a Division on whether to use nuclear weapons and that hon. Members should go to the Aye or No Lobby to establish who makes the decision. The Prime Minister and perhaps

the Secretary of State for Defence and a few cronies from the chiefs of staff will make the decision. How undemocratic that is! It is an affront to civilisation.
Those who believe in the threat of mass extermination should commit suicide and let us get on with living. There might be much enthusiasm for the Prime Minister setting an example. That might be more widely welcomed on Conservative Benches than she thinks. There is a very strong case for getting rid of nuclear weapons.
I have been a unilateralist since the early 1960s, when I was a member of the Campaign for Nuclear Disarmament. I believe that we can persuade the vast majority of people in the United Kingdom of the sense and sensibility of this course. That is the principle that we should stick by.

Mr. John Browne: Before beginning my six-minute speech, may I declare an interest as an active member of the Territorial Army.
In three weeks' time, we shall observe Remembrance Sunday. This year, it will be of special significance because it will be the 70th anniversary of 1918—the end of the great war, or the war to end all wars. Unfortunately, at the same time, we shall be remembering the dead of the second world war, a war brought about by an aggressor who gained encouragement from our apparent weakness. We should all remember that and vow, this Remembrance Sunday, to ourselves and for future generations that no apparent weakness on our part will lead to war. We really should remember that, particularly when we come to defence budgets.
Peace is always under threat and I would like to mention as many of the threats as time allows. First, there is the change in the perceived military threat. History shows us that there are three basic kinds of peace. There is the peace of death that greeted Germany at the end of the second world war. There is the peace of deterrence under which we live now on an East-West basis. Thirdly, there is the peace of détente—for example, the present peace between Germany and France. On a strategic European basis, we have grown accustomed to the peace of deterrence, but Mr. Gorbachev appears—and I emphasise the word "appears"—to offer a chance to move towards a new type of peace, a peace of détente.
What are they really up to in the Russian camp? Since the INF treaty we hear increased talk not about defence but about defensive defence. Meanwhile, the Soviets maintain their teaching, tactics, organisation and equipment for fast, surprise attack. As yet there is no reality in defensive defence.
Secondly, I would like to mention the cultural threat. Mr. Gorbachev is not only popular, but very well-known throughout the West. He is known not merely as Gorbachev, but as Gorby. He has proposed a new type of peace, that of detente, which is very attractive to the western grass roots. It sounds good, as if it might be cheaper. He also has great ability, using his western style charisma, to talk over the heads of Western leaders and negotiators directly to the grass roots throughout the western world. He is widening the defence debate from out of chambers like this to the grass roots throughout the Western world.
Today, everyone seems to have a view on defence. Unfortunately, many of those views are based on a woeful lack of knowledge and a belief that defence is somehow


simple when, in reality, it is extremely complex. I believe that the Government have a duty now to improve not only the knowledge but the quality of thinking about defence in this wider debate. We must not be content merely to issue information from the Ministry of Defence on a passive basis but must take an active role in teaching, organising seminars, and bringing trade union leaders, lawyers, school teachers, bankers, students and those sort of people into these seminars so that they learn to think in a more informed way about defence and to participate in quality debate. In this respect I very much support the parliamentary armed services scheme.
My third point is about defence spending. At a time when the strategic East-West peace of deterrence is changing—even, apparently, towards a peace of detente —new and hitherto unexpected enemies may be tempted to threaten us. It would be very unwise for us to assume that the Soviet Union is, or will remain our sole enemy. I note with interest that the intended exercises in Switzerland this year are not only against the orange forces from the east but against the blue forces from the west.
Defence spending in the United Kingdom is a measure not just of our money or wealth but of our national commitment and will to defend ourselves. It is watched worldwide. Costa Mendez saw that before the Falklands. It is an example to our NATO allies. It is a message to our potential enemies. Any effective cut in our defensive capability would be a staggering thing to contemplate at the moment, particularly in the light of the forthcoming American presidential election and the problems of burden-sharing. I therefore strongly support my right hon. Friend in his struggle with the Treasury for the realistic funding that he asked for at the very beginning.

Mr. Morgan: £1·4 billion.

Mr. Browne: Yes, £1·4 billion. Obviously, we must strive for value for money and cutting waste. But cutting waste is not the same as cutting costs. Some costs are necessary to do business.
There are many things that I would like to suggest, but one I should like to make in the last ten seconds is this: why do we not allow the men and women on the spot in the armed forces to suggest cuts, and give them a financial incentive for doing so—maybe 50 per cent. of the cut achieved in the first year—as a bonus to their pay? Then we would get cuts made by people inside the armed forces and not exclusively by people outside the armed forces who have little or no practical experience, and often risk in their recommendations the cutting of bone rather than fat.

Mr. Sean Hughes: It is customary in defence White Paper debates to pay tribute to the men and women in our armed forces, and I add my support and that of my party to that which has been expressed by right hon. and hon. Members on both sides of the House.
I also echo the demand made so eloquently by my hon. Friends the Members for Eccles (Miss Lestor), for Renfrew, West and Inverclyde (Mr. Graham) and for Motherwell, North (Dr. Reid) for an inquiry into the circumstances surrounding the sale of two former Royal Ordnance factories. My hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy), in a very powerful

speech, spoke of the lulling, almost deceiving, presentation of the White Paper. My only disagreement with him is that I would remove the qualification "almost".
After the hilarity which greeted the 1987 White Paper's attempt at historical perspective, some of us thought that the Secretary of State, or at least his script writers, might have been a bit more circumspect this year—but not a bit of it. This year we are not given just history; we are entertained to a consideration of theory.
As I read through chapter 1 of this year's White Paper, I was reminded of a similar publication which established historical fact and arrived at a considered judgment in much the same way, "1066 And All That" by Sellar and Yeatman. Hon. Members familiar with that classic will recall how the authors were able to classify everything as either "Good Things" or "Bad Things" so that the Norman conquest, the great plague and the American war of independence were all good things, while Mary Tudor, political economy and Napoleon were all bad things. The defence White Paper is written in exactly that style. The big difference is that Sellar and Yeatman wrote their classic as a spoof. I take it that the Government are deadly serious.
Let us remind the House of just one gem from the White Paper, although as The Observer review of "1066 And All That" said:
Quotation is hopeless: every sentence clamours for it.
In paragraph 4 on page 5 of the White Paper is a confident assertion that
Soviet operational art … has its roots in a long-standing tradition of defending the homeland by taking the offensive.
I do not want to exaggerate, but that is a bit rich coming from the Tories. If we take the year 1815 as the date when we became top nation—I cannot remember whether that is a phrase from the White Paper of from "1066 And All That"—a cursory glance at the history books suggests that we have been involved in at least 52 significant wars. In all our 52 wars of self defence, we have had two opium wars, two Sikh wars, two Maori wars, three Burmese wars and four Ashanti wars. We completed a third Maratha war and the eighth and ninth Kaffir wars. We even managed an invasion of Afghanistan. Indeed, to prove to the Russians that anything they might do we could do better, we invaded and occupied that country twice. [Interruption.] Not since 1815.
It gives me no pleasure to recall those unsavoury events which earned our country such a sinister reputation in so many parts of the world and prompted so many people to suspect our motives and fear our ambitions. If we use history to demonstrate the threat perception of the enemy, we must have the gumption to realise that our enemy will use our history to demonstrate their threat perception of us. It helps to have a more balanced view. It helps to move away from the infantile historical perspectives that seem to characterise the Government's defence White Papers. The Prime Minister had the cheek to tell the Conservative women's national conference in May this year that the Labour party needs to have a better understanding of history. Even the Prime Minister's impertinence pales in comparison with that of the Secretary of State for Education and Science who, on his recent visit to a Moscow school, declared to his hosts, with Mellor-like diplomacy, that we all had to acknowledge that history was a problem for the Soviets. It is not half as much of a problem for them as it is for the Tory party.
It is not just the Government's historical background that is inaccurate. In their statistical comparisons between


NATO and the Warsaw pact inaccuracies abound. The Government constantly talk up the preparedness of the Warsaw pact compared to NATO. I should say in passing that that is a dangerous line of argument for a Government who have been in a position to so domething about that for nine and a half years.
According to the White Paper, it is not just in military doctrine that the Warsaw pact displays a great conformity. It is displayed in economic structures, personnel reliability and inter-pact co-operation. The casual White Paper reader must be under the impression that the Warsaw pact is some great monolithic cohesive mass. There is not even a hint, despite the speech of the hon. Member for Ruislip-Northwood (Mr. Wilkinson), that events in Poland, Hungary, Romania or Czechoslovakia are suggestive of some diversity, to say nothing of events within the Soviet Union itself from as far apart as Latvia on the Baltic to Azerbaydzhan in the south.
I have no inclination to argue that the Warsaw pact represents a loose association of democratic states, free to come and go as they please. However, for the Government to argue that the pact is a great monolith is nonsense. All the military experts I have read now argue that any comparison between the armed strength of the Warsaw pact and NATO, if it is to be meaningful, must take account of the potential for unreliability within the pact.
A similar word of caution must be given to the casual White Paper reader when the Government indulge in their annual bean count of who has what and where. The White Paper make a slight genuflection to the problems inherent in comparison by stating that
the complexities of comparing capabilities of specific equipments are well illustrated in the case of tanks.
However, 12 paragraphs later it dismisses that acknowledgement by saying:
older Warsaw Pact tanks, for example, are more easily written off on paper than on the North German plain … it is a false and dangerous delusion to discount the reality of numbers.
That is the problem with the way in which the White Paper argues. We are back to a black and white interpretation of everything. No one is suggesting——

Mr. Julian Brazier: Twenty years ago the imbalance in the number of tanks was frequently thought by experts to be balanced by the supposed technological superiority of Western tanks. Today the modern Soviet tanks—they are building many new ones at a much faster rate than the West—are, in some respects, superior to ours.

Mr. Hughes: I shall come to the qualitative comparison in a moment.
No one is suggesting that we discount the reality of numbers. We are simply saying, as my hon. Friend the Member for Clackmannan (Mr. O'Neill) said yesterday, that if we are to have a meaningful defence debate we should try to discover what the reality is. As the White Paper makes specific reference to the complexities of the tank comparison, I shall take that as an example. According to the Pentagon's 1988 assessment of the Soviet threat, there are 53,000 Soviet main battle tanks in the area from the Atlantic to the Urals. The same figure is given in the International Institute for Strategic Studies report that was published yesterday. According to the report of

Senator Carl Levin, the chairman of the Senate arms services sub-committee on conventional forces and alliance defence, there are 52,200. According to the White Paper, there are 51,000, which is proof that it is easier to wipe off between 1,200 and 2,000 tanks on paper than it is to wipe them off of a north German plain.
Perhaps the Minister will explain that discrepancy, because normally the White Paper talks of the Warsaw pact's capability. Why is there an underestimate, unless it is to enable the Government to back their claim that over half the Warsaw pact's tanks are modern?
The White Paper claims that in the Atlantic to the Ural region and on the central front more than half the Soviet tanks are modern, but the Pentagon claims that the figure is about 40 per cent.
To prove that the Warsaw pact not only has a quantitative lead but is catching up with NATO's qualitative lead, the Government not only flagrantly wipe out between 1,200 and 2,000 tanks but change their definition of "modern". By their definition, the Chieftain tank, which was introduced in the mid-1960s—to which my right hon. Friend the Member for Dudley, East (Dr. Gilbert) referred and which the hon. Member for Weston-super-Mare (Mr. Wiggin) yesterday referred to as an aging weapon—is not sufficiently modern for Britain and needs to be replaced by the Challenger tank. In the same breath, they argue that all Warsaw pact tanks introduced in the mid-1960s must be classed as modern and so, QED, they prove that over half the Warsaw pact's tanks are modern.
Everything that I have read suggests that the greatest danger from the Warsaw pact is a surprise attack, although it is difficult for the layman to imagine a surprise attack of over 50,000 tanks. As the decision to go nuclear would be taken early in the hostilities, speed is of the essence. When we talk of large numbers of tanks, we must cope with what Mearsheimer has identified as the "crossing-the-T" phenomenon. Simply put, there is not enough room for the attacker to place all of its 24 divisions at the point of the attack. As the size of the attacking force increases, the logistical as well as the command and control problems increase proportionately:
Although the notion is perhaps counter-intuitive, bigger divisions are not necessarily better divisions when an attacking force is attempting to effect a blitzkrieg. A Pact defensive would have to traverse the obstacle-ridden terrain which covers almost all of Germany and restricts the movements of large armoured units.
In other words, there is a danger of a monumental traffic jam in the middle of central Europe. Instead, the White Paper conjures up the nightmare of swift, massive progress.
In a section of the White Paper entitled "Quality of Men", paragraph 16 makes a dismissive comment that
Soviet military doctrine … does not require the soldier in the field to show initiative … ".
The observation on Warsaw pact training does not exactly fit the Governments nightmare of a huge, monolithic, well-trained and up-to-date machine.
The White Paper declares that the Warsaw pacts plans are as well-rehearsed as NATO's. The Warsaw pact declares 22 exercises involving 13,000 or more soldiers, while the White Paper lists 23 major NATO exercises in 1987. No reference is made to the fact that, as Jonathan Dean, the former American ambassador to the mutual and


balanced force reductions talks reminded us last year, NATO's annual exercises of 250,000 men and more are over twice the size of the largest Warsaw pact exercises.
The White Paper refers to the geographical advantages enjoyed by the Warsaw pact, with consequent benefits for its reinforcement capability. In terms of the Warsaw pacts ability to achieve a quick victory—we cannot overemphasise the importance attached to speed when considering the doctrine of flexible response—geography works to NATO's advantage. That is why, as General Bernard Rogers, who until last year was supreme allied commander of NATO forces in Europe, said:
It is important to remember when assessing the role of non-strategic weapons that numbers per se are not critically decisive. It would be as foolish for us to try to match each Soviet nuclear system with one of ours as it would be foolish for us to try to match them man for man and tank for tank at the conventional level … As a defensive alliance we do not need to match the Warsaw Pact one for one in any category of forces".
Why then has the defence debate been conducted throughout the country at that level? It is because that suits the Government. The Government do not want a defence debate. They simply want an exchange of slogans. Some Conservative Members' speeches towards the end of the debate were a perfect example of that. We should all remember that, when we relegate the defence debate to an exchange of slogans, we play into the Government's hands.
The Conservative party acts as though it has a monopoly on patriotism. The tone is set by the Prime Minister. Returning from a NATO summit in March this year, she said that the Labour party had
no memory, no stomach, no spine and no guts".
The Conservative party had already plunged into new depths in the general election last year with its now infamous poster, depicting a young soldier with his hands raised in surrender, and entitled, "Labour's defence policy." Conservative Members may think that is smart, but that poster and their attitude, which was repeated tonight, are deeply offensive to millions of Labour party members and supporters whose patriotism is unchallengeable.

Sir Antony Buck: Some of us are prepared to concede that we do not have a monopoly on patriotism, but we are interested in knowing the defence policy of the hon. Gentleman and his colleagues.

Mr. Hughes: The great divide in defence polices in Britain cannot be so shamefully characterised as being between the patriotic and the treacherous, nor can it be so ridiculously dismissed, as the Prime Minister seems to think, as between those with stomach, spine and guts and those without those attributes. The great divide is between those who want to find a way of removing the nuclear option from the strategy of the two blocs and those who believe that the possession of nuclear weapons, however tenuously independent, somehow confers on the owner the title of super-power.
The White Paper pompously declares on its opening page:
More open internal policies, which bring the Soviet people more information about their own country and the world outside, are self-evidently desirable
—and that from the Government of GCHQ, "Spycatcher" and Zircon.
The misinformation should stop. The ludicrous warping of history should stop. The implication, the very

meaning of the doctrine of flexible response should be spelt out so that the people of this country know what it is. General Rogers has written:
the people of the sixteen sovereign nations that constitute the Atlantic Alliance have a decisive role to play concerning our strategy. No NATO strategy wil be credible or effective unless there is a broad-based consensus within the Alliance that it is appropriate, unless there is substantial support for it, and unless there is a firm commitment to provide whatever measures are necessary to sustain it.
I do not disagree with that. But we cannot have a broad-based consensus, substantial support or firm commitments for and about strategies which are deliberately obscured. That is why the claim at Brighton last week by the Secretary of State, that we must all admit that the Governments defence policy was the will of the British people, is so ludicrously absurd.
We could make a start tonight. We could see how much time the Minister allocates to the doctrine of flexible response. We could see how much time he devotes to commenting on the recent words of Robert McNamara, the former American Secretary of State and the man who, more than any other human being alive, was responsible for formulating the doctrine of flexible response. We could see how much time he devotes to agreeing with or rebutting McNamara's comments that most Americans, and to that we can add Britons,
are simply unaware that NATO strategy calls for early initiation of the use of nuclear weapons in a conflict with the Soviets. Eighty per cent. of them believe we would not use such weapons unless the Soviets used them first. They would be shocked to learn that they are mistaken. And they would be horrified to be told that senior military commanders themselves believe that to carry out our present strategy would lead to the destruction of society. But those are the facts.
Whenever we press the Government about this, they reply that it is not the use of nuclear weapons that is of value but their deterrent effect. The doctrine of flexible response is mentioned on three occasions in the White Paper. Most of us had believed that the nuclear weapon was always a weapon of deterrence, and was used as a threat to prevent the enemy from using their nuclear weapon first. That is not the role of nuclear weapons in flexible response. There is a clear commitment that, faced with a conventional attack from the Warsaw pact. NATO would go nuclear at some stage.
I am under no illusion that the 1 million Warsaw pact soldiers assembled in the central region are there for their health, or that the 50,000 or so tanks are there for lack of garage space, but common sense tells me that the Warsaw pact must have the odd suspicion about us. It should be the role of the British Government to reduce tension, and they should not lag behind in every initiative for peace. We hear a great deal from the Government about the need to modernise our weapons. We hear nothing about the need to modernise our strategy.
The White Paper proclaims 1987 as a successful year for the Conservative defence policy and points to the INF treaty as proof. I have always held that it is one of the more endearing characteristics of Conservative Members that, while they resolutely refuse to accept responsibility for any of their own actions, they consistently claim credit for the achievements of others. It ought to be remembered that, since the death of Stalin, the influence of the Soviet military in the formulation of Soviet defence policy has grown. That is why the dismissal of Defence Minister Sokolov and Marshals Koldunov and Konstantinov, after


the Matthias Rust affair, facilitated an improvement in East-West relations. It is a particularly fitting verdict on the Government that the aerobatics of a West German adolescent have done more for international peace and rapprochement than nine and a half years of Conservative Government. It is no wonder that there is an obligatory Churchill quotation in every defence White Paper, because the Government are set in a cold war time warp. The exciting things that are happening in the world are passing us by.
I believe that changes taking place in the Soviet Union would have taken place, and will take place, with or without hiccups, whether Gorbachev is there or not, because we are seeing there a collapse of a societal model. Nevertheless, we should not underestimate Gorbachev's personal contribution. The Prime Minister has to come to the terms with the fact that he is there, and with the fact that Brezhnev is no longer with us, even if there is speculation about the length of his absence. She has to come to terms with the fact that Stalin is no longer there.
Everything that the Government do is geared to the nuclear pretence. To that end, they unilaterally reduced spending on conventional armaments, bilaterally agreed to rent missiles from the United States and multilaterally agreed at Montebello to modernise the nuclear stock. Unilateral, bilateral and multilateral, all at the same time. What a shambles. To hide the shambles of their policy, Conservative Members try to turn these debates into discussion of a Labour Governments defence estimates —as if the Tory party had not been in power for nine and a half years.
We are in the second year of this Parliament. If recent experience is anything to go by, we are probably three years away from the next general election. It is the duty of the Opposition, in scrutinising the Governments plans, to set out their own objectives. Our objectives are clear. We believe in a well-defended Britain. We remain committed members of NATO and we want to move this country and ultimately both power blocs away from nuclear dependence.
Conservative Members have pressed my hon. Friends to say what proportion of GNP we would spend on defence. It would be irresponsible, and anyway impossible, to say precisely how much it will cost to do this and precisely how much it will cost to do that. We do not have the advice which is available in government from professional advisers. We do not know what the world situation or the domestic situation will be when we come to office, and before acting we will want to consult our allies, but our objective is clear.
I do not know why Conservative Members are getting so excited, because I chose my words very carefully. Lest the same thing befalls me as befell Senator Biden, let me refer to the document from which I took those words. On page 67, under the title "Defence", it is stated:
It would be irresponsible, and anyway impossible, to say by precisely how much we shall do this, and precisely how much it will cost. We do not have the advice which is available in government from professional advisers; we do not know what the world situation—or the domestic economic situation —will be when we come to office; and before acting, we should want to consult our allies. But our objective is clear.
That comes from "The Right Approach", a statement of Conservative aims published two and a half years before the 1979 general election. As usual, it is one rule for them

and another for the rest of us. I have great pleasure in commending to the House the amendment in the name of my right hon. Friend the Leader of the Opposition.

The Parliamentary Under-Secretary of State for the Armed Forces (Mr. Roger Freeman): The hon. Member for Stockton, North (Mr. Cook), who made a maiden appearance as defence Whip at the Dispatch Box last night, referred to the armed forces parliamentary scheme which is, as he explained to the House, a trial programme to give Members of Parliament a chance to be assigned to an armed forces unit for three weeks a year. It provides experience of the forces, particularly for those, like myself, too young to have done national service. I am glad that he found it a success, and I hope that the scheme continues. The late Member for Epping Forest, Sir John Biggs-Davison, would have approved of the scheme. We miss him tonight. We miss his expert and cogent contribution to this annual debate.
Many questions have been asked during the debate, and I shall try to cover as many of them as I can. The hon. Member for Sheffield, Attercliffe (Mr. Duffy) asked me 14 questions in a very brief speech. He would not expect me to answer all of them, but I shall ensure that Ministers, including myself, respond to all the points that he has raised. I shall ensure that either I or one of my colleagues responds to the question that my hon. Friend the Member for Dumfries (Sir H. Monro) put to me.
The hon. Member for Knowsley, South (Mr. Hughes) —if I could have his attention for a moment—argued that the Ministry of Defence and NATO have in some way overestimated Soviet conventional capacity in Europe, particularly tank capacity. If he is right, then obviously the Soviets pose less of a threat, but how does that square with the official Opposition's argument throughout the two days of debate that they want increased spending on conventional weapons? Why did he not mention the increased Soviet capabilities in their submarine fleet and long-range aircraft, presumably on account of a perceived threat on the central front? He took in isolation one category of weapons system and did not paint a fair picture.
The hon. Member for Stockton, North and my hon. Friend the Member for Dumfries also spoke about the well-being of the young men and women of our armed forces and, particularly, about their pay, allowances, accommodation and opportunities for house purchase. I can assure both hon. Members and the House that we treat those matters most seriously.
On coming into office in 1979, the Government put service pay on a level that was based on the earnings of those in comparable civilian employment. In every year since then, although there was staging in two years, the Government have honoured the recommendations of the independent Armed Forces Pay Review Body. We believe that service men and women generally regard their pay as both fair and reasonable.
The House will know that earlier in the year my right hon. Friend the Secretary of State announced the outcome of a comprehensive review of armed forces' allowances. It was the first review of that sort to be carried out for many years. It was designed to ensure that service allowances would be up to date, cost-effective and appropriate to the requirements of modern service life. As a result, some


significant improvements have been made. For example, we recognise that nowadays many service personnel choose to buy and live in their own homes. We have therefore substantially increased the financial assistance that is available to them when they are required to move home following a posting to a new location. We have removed many differences which existed between the treatment of single and married personnel. It will take some time for the full effects of these changes to become apparent. We believe that the majority of service personnel recognise that the broad thrust of what we are doing is right.
The hon. Member for Clackmannan (Mr. O'Neill) referred yesterday to the demographic trough and the effect that this would have on recruitment and on service manning. The three services have recognised the implications of the trough for many years. We take it seriously, and are taking active steps to ensure that we can compete with private sector employers in what, as far as the armed forces are concerned, is a voluntary service. About 5 per cent. of our armed forces' personnel are women, and the figure is much higher in the United States and in Canada. We have no intention of changing our rules on no combat duty for women. We do not intend to change the rules about discharging women when they become pregnant. There is room, however, for the employment of more women in the armed forces. That will go some way to dealing with the demographic trough.

Mr. Wilkinson: It is much to be welcomed that women are to fly as rear crew members in AWACS. Other armed forces allow women to fly communications aeroplanes. As the Royal Air Force has a pilot shortage, could it not do the same?

Mr. Freeman: I cannot give my hon. Friend any assurance that women will occupy cockpits. I cannot give him any comfort on that score. However, we shall keep the matter under review. He is right to say that women will fly in AWACS.
The hon. Members for Rhondda (Mr. Rogers) and for Attercliffe referred to defence expenditure. I repeat for the benefit of the House the three salient features that are expressed clearly in the "Statement on the Defence Estimates". First, since 1979 to the current year there has been a 20 per cent. increase in real terms in the defence budget. Secondly, we spend 4·7 per cent. of our gross domestic product on defence. That is a higher proportion than that of any of our major European allies. Thirdly, when it comes to the future—I share the frustration of the right hon. Member for Dudley, East (Dr. Gilbert) that this debate comes first—the House must await the Autumn Statement.
My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) asked for a defence review. Gone are the days when, especially under the last Labour Government, there were periodic reviews. The process of budgeting and reviewing commitments is a much more sophisticated system nowadays. It is a continuous process. We shall not take any special steps to have a major defence review. My right hon. Friend the Secretary of State has to face difficult decisions all the time, and we shall take them regularly. As regards BAOR, there are no steps afoot to change the role of 1st British Corps or our commitment to NATO.
The right hon. Member for Dudley, East mentioned the problems of developing a command system for the type 23

frigate. They have been faced up to with the cancellation last year of the contract for the original command system and the subsequent placings of competitive project definition contracts for a solution based on the latest technology. It is true that the first type 23s will enter service without a fully operational command system, but their weapons and sensors will be capable of independent action, enabling the ships to fulfil their operational tasks.

Mr. O'Neill: I am grateful to the hon. Gentleman for conceding that the command and control system will not be available to more than the first of fleet, because the impression we received last year was that only the first of fleet would not have the command and control system. As he has now admitted that this is so, what limitations will there be on the operational capabilities of the frigates when they come into service?

Mr. Freeman: We expect no significant operational limitations. The number of ships affected will depend on the success of the contracts that we have placed.
My hon. Friend the Member for Ilford, South (Mr. Thorne) raised the subject of the Gurkhas. I repeat the commitment which Ministers have given before about the future of the Gurkhas after we leave Hong Kong. I know that the Select Committee plans a visit to Nepal towards the end of the year, and I hope to follow it there. The Government will announce their conclusions next year about how that commitment to the Gurkhas will be fulfilled.
My hon. Friend also asked about the AWACS offset deal. Boeing's first report listed contracts totalling $141 million, and, following our evaluation, we have allowed a total offset credit of $96·5 million. The second report listed contracts totalling about $192 million, bringing the cumulative total of contracts placed to $333 million. We are now evaluating the second report—[Interruption.] There is a long way to go, but a long time is still available.
My hon. Friend the Member for Dumfries and many other right hon. and hon. Members spoke about low flying and aircraft safety. The need for training in low flying has been recognised by all for some time and accepted by successive Governments. There is understandable public concern about the risks in low-flying training. It came to the fore as a result of the tragic accident on 9 August in the constituency of my hon. Friend the Member for Penrith and The Border (Mr. Maclean), when two Tornado aircraft engaged in training at night were involved in a mid-air collision and four aircrew were killed. A board of inquiry is still sitting. As a result of that accident, a detailed re-examination of the procedures for low-flying training at night has taken place.
It is important to bear in mind that, of major aircraft accidents in the past five years, only about one in four has occurred when the aircraft was engaged in low-flying training. In those cases, the primary cause of the accident was not always attributable to the low-flying training itself. Nevertheless, changes have been made following the re-examination.
With effect from 10 October, steps have been taken to allocate separate days by command: strike command, Royal Air Force Germany, and the United States Air Force; and aircraft will move, well separated, broadly in a clockwise direction around the United Kingdom low-flying system.
In future we intend to introduce a computerised notification and warning system in the United Kingdom low-flying system, based on a central computer with a larger network of terminals extending to every low flying squadron. Such a system will accept notification of sortie details and in return provide information on other aviation activities, warnings and restrictions in low flying areas— information which is now fed manually into the system. I hope that the House accepts that the steps that we have taken as a result of the tragic accident have been in the right direction——

Mr. Bill Walker: As my hon. Friend knows, I fully support the necessity for low-flying operations, which are carried out extensively throughout Scotland and in my constituency. Will he bear in mind the good public relations that we obtain from the use of the helicopter flight at Leuchars, which substantially offsets the aggravation caused by low, noisy and fast jets? We can explain it by saying that they both come from the same air force, and therefore that the benefit of the helicopters substantially offsets the disadvantages of the jets.

Mr. Freeman: I can give my hon. Friend the Member for Tayside, North (Mr. Walker) and also the hon. and learned Member for Fife, North-East (Mr. Campbell) and my hon. Friend the Member for Devon, North (Mr. Speller) that assurance.

Dr. Reid: rose——

Mr. Freeman: No, I am answering my hon. Friend.
I can give an assurance that when we reach a decision —and we have not done so yet—about search and rescue deployment for those areas of the United Kingdom about which we have not made an announcement we will take into account the benefit that, in the minds of the public, search and rescue is perhaps the acceptable face of low flying.

Dr. Reid: rose——

Mr. Freeman: I am sorry, but I have only 10 minutes left. I am sure that the hon. Gentleman will forgive me, but I must make progress.
I shall deal briefly with the points raised by other hon. Members concerning the reserve forces.

Mr. Michael Jopling: rose——

Several Hon. Members: Oh!

Mr. Jopling: My hon. Friend has made a most important statement regarding low flying, which causes immense difficulties in many parts—especially the north of England. Will he give an undertaking that the welcome and important announcement that he has made tonight means that never again in future ought pilots of low-flying aircraft find that there are other low-flying aircraft in the same area without their knowledge?

Mr. Freeman: No, I cannot give my right hon. Friend that assurance. The assurance I can give him is that, in a particular area, both aircraft will be well separated and flying in the same direction. I hope that that answers his concern.

Dr. Reid: rose——

Mr. Freeman: No, I must finish answering the remaining points.
I must answer my hon. Friends the Members for Weston-super-Mare (Mr. Wiggin) and for Kingswood (Mr. Hayward), who raised the question of the reserve forces. The equipment used by the Territorial Army and the Regular Army is the same as they have the same role. We have taken positive steps to increase the bounty, particularly for those who have served for more than three years.
My hon. Friend the Member for Kingswood specifically asked me about over-commitment of the Territorial Army. We shall ensure that all TA units are made well aware that the minimum requirement is clearly explained. It is wrong that TA soldiers who are giving their own time should become over-committed and be expected to do too much. That way lies bad recruitment.
This has been a one-sided debate, because most of the debate has been on the Opposition Benches. [Interruption.] Then Opposition Members have not been listening. The hon. Member for Dunfermline, West (Mr. Douglas) rightly said that there is room on the Labour Benches for only two positions that, to use his words, are credible, and that the electorate would understand. He said that the first was to keep Trident. That is not only the policy of this Government but has, by extension to Polaris, been the policy of all Governments, both Labour and Conservative, since the war. I may say to the right hon. Member for Chesterfield (Mr. Benn), who asked a specific question about targeting and Trident, that Trident does not depend—I repeat, does not depend—on a United States satellite system for its operation and targeting. It is independent of that system. The right hon. Gentleman does not believe me, but I give the House that assurance.
The second of the credible options to which the hon. Member for Dunfermline, West referred was to scrap our independent deterrent, and by definition to scrap also United States bases. That is what he talked about as being the credible alternative. That is in the amendment of the hon. Member for Islington, North (Mr. Corbyn). That is the neutralist position that the hon. Member for Dunfermline, West believes is the second alternative. The neutralist position is unacceptable to the British electorate, and any political party that adopted that platform would become permanently unelectable.

Dr. Reid: On a point of order, Mr. Speaker. May I bring to your attention the fact that the Minister is not replying to the debate? He has refused to give way to me, and has refused to answer questions about the Royal Ordnance factory in Bishopton.

Mr. Speaker: Order. There are five minutes to go, and we have no idea what the Minister is going to say. As far as I am concerned, what he has been saying is in order, and that is my responsibility.

Mr. Freeman: The hon. Member for Dunfermline, West also said that there was no room for shilly-shallying as far as the Opposition Front Bench was concerned. He was referring directly to his right hon. and hon. Friends on the Front Bench. I think that shilly-shallying, by his definition, is what we get from the Opposition Front Bench. As far as my hon. Friends and I can understand, their policy is to believe in complete nuclear disarmament in return for an


insignificant Soviet nuclear disarmament. That is what "something for something" means. It means all our strategic nuclear capability in return for some of the Soviets' capability.
According to the right hon. Member for Leeds, East (Mr. Healey), who spoke at the Labour party conference, that equation is four of our submarines—Polaris or Trident—in return for eight Soviet submarines. That is an inadequate policy to place before the House and the electorate. Furthermore, their policy would be to shelter under the United States nuclear umbrella, which is a dishonest policy.

Mr. Cryer: Will the Minister give way?

Mr. Freeman: No. The hon. Member for Liverpool, Walton (Mr. Heffer) said yesterday that he did not know into which Lobby he would pass tonight when we vote on the Opposition's amendment. He said that he would be thinking very carefully about which way he, and presumably some of his colleagues, would be voting in the first Division. Presumably, by definition, the right hon. Member for Chesterfield will also be thinking very seriously. I ask both of them, and their colleagues, to consider three aspects of the Opposition Front Bench policy that we have been discussing in the past two days, and to decide whether they can support that policy. First, the Opposition Front Bench——

Mr. Cryer: rose——

Mr. Speaker: Order. The Minister is not giving way.

Mr. Freeman: First, the Opposition Front Bench specifically made no commitment to scrap Trident on coming into office, which they will not in 1992. Instead, they have suggested an inadequate barter compromise: all our nuclear capability in return for some of the Soviets' nuclear capability. Secondly, there is no mention in the Opposition's official policy of removing American bases. Thirdly, there is no promise to switch any defence savings to social programmes in the United Kingdom. If the hon. Gentleman votes with them tonight——

Mr. Rogers: On a point of order, Mr. Speaker.

Mr. Speaker: Order. It is two minutes to ten.

Mr. Rogers: On a point of order, Mr. Speaker. Five right hon. and hon. Members have brought up the issue of Royal Ordnance factories, and the Minister has not the guts to answer.

Mr. Freeman: The hon. Gentleman's point of order was born of his frustration about the differences of opinion on the Opposition Benches between Opposition policy and the policy suggested and espoused by the hon. Member for Walton.
The policies advocated by the Opposition Front Bench spokesmen do not represent united Labour party policy. If they are offered to the electorate at the next general election, the Opposition will surely lose. Unless there is a radical change, the Labour party will remain permanently unelectable.

Question put, That the amendment be made:—

The House divided: Ayes 197, Noes 321.

Division No. 448]
[10 pm


AYES


Abbott, Ms Diane
Grant, Bernie (Tottenham)


Adams, Allen (Paisley N)
Griffiths, Win (Bridgend)


Allen, Graham
Grocott, Bruce


Archer, Rt Hon Peter
Harman, Ms Harriet


Armstrong, Hilary
Hattersley, Rt Hon Roy


Ashley, Rt Hon Jack
Heffer, Eric S.


Ashton, Joe
Henderson, Doug


Banks, Tony (Newham NW)
Hinchliffe, David


Barnes, Harry (Derbyshire NE)
Hogg, N. (C'nauld &amp; Kilsyth)


Barron, Kevin
Holland, Stuart


Battle, John
Home Robertson, John


Beckett, Margaret
Hood, Jimmy


Bell, Stuart
Howell, Rt Hon D. (S'heath)


Benn, Rt Hon Tony
Hoyle, Doug


Bennett, A. F. (D'nt'n &amp; R'dish)
Hughes, John (Coventry NE)


Bermingham, Gerald
Hughes, Robert (Aberdeen N)


Bidwell, Sydney
Hughes, Roy (Newport E)


Blair, Tony
Hughes, Sean (Knowsley S)


Boyes, Roland
Illsley, Eric


Bray, Dr Jeremy
Ingram, Adam


Brown, Gordon (D'mline E)
Janner, Greville


Brown, Nicholas (Newcastle E)
John, Brynmor


Brown, Ron (Edinburgh Leith)
Jones, Barry (Alyn &amp; Deeside)


Buchan, Norman
Jones, Ieuan (Ynys Môn)


Buckley, George J.
Jones, Martyn (Clwyd S W)


Caborn, Richard
Kaufman, Rt Hon Gerald


Campbell, Ron (Blyth Valley)
Kinnock, Rt Hon Neil


Campbell-Savours, D. N.
Lambie, David


Clark, Dr David (S Shields)
Lamond, James


Clarke, Tom (Monklands W)
Leadbitter, Ted


Clay, Bob
Leighton, Ron


Clelland, David
Lestor, Joan (Eccles)


Clwyd, Mrs Ann
Lewis, Terry


Cohen, Harry
Litherland, Robert


Coleman, Donald
Livingstone, Ken


Cook, Frank (Stockton N)
Lloyd, Tony (Stretford)


Cook, Robin (Livingston)
Lofthouse, Geoffrey


Corbett, Robin
Loyden, Eddie


Cousins, Jim
McAllion, John


Crowther, Stan
McAvoy, Thomas


Cryer, Bob
McCartney, Ian


Cunliffe, Lawrence
Macdonald, Calum A.


Darling, Alistair
McFall, John


Davies, Rt Hon Denzil (Llanelli)
McKay, Allen (Barnsley West)


Davies, Ron (Caerphilly)
McKelvey, William


Davis, Terry (B'ham Hodge H'l)
McLeish, Henry


Dewar, Donald
McNamara, Kevin


Dixon, Don
McTaggart, Bob


Dobson, Frank
McWilliam, John


Doran, Frank
Madden, Max


Douglas, Dick
Mahon, Mrs Alice


Durfy, A. E. P.
Marek, Dr John


Dunnachie, Jimmy
Marshall, Jim (Leicester S)


Dunwoody, Hon Mrs Gwyneth
Martlew, Eric


Eadie, Alexander
Maxton, John


Eastham, Ken
Meacher, Michael


Ewing, Harry (Falkirk E)
Meale, Alan


Ewing, Mrs Margaret (Moray)
Michie, Bill (Sheffield Heeley)


Fatchett, Derek
Moonie, Dr Lewis


Field, Frank (Birkenhead)
Morgan, Rhodri


Fields, Terry (L'pool B G'n)
Morris, Rt Hon A. (W'shawe)


Fisher, Mark
Morris, Rt Hon J. (Aberavon)


Flannery, Martin
Mullin, Chris


Flynn, Paul
Murphy, Paul


Foot, Rt Hon Michael
Nellist, Dave


Foster, Derek
Oakes, Rt Hon Gordon


Foulkes, George
O'Brien, William


Fyfe, Maria
O'Neill, Martin


Galbraith, Sam
Orme, Rt Hon Stanley


Galloway, George
Parry, Robert


Garrett, Ted (Wallsend)
Patchett, Terry


George, Bruce
Pike, Peter L.


Godman, Dr Norman A.
Powell, Ray (Ogmore)


Golding, Mrs Llin
Prescott, John


Gordon, Mildred
Primarolo, Dawn


Gould, Bryan
Quin, Ms Joyce


Graham, Thomas
Radice, Giles






Rees, Rt Hon Merlyn
Steinberg, Gerry


Reid, Dr John
Stott, Roger


Richardson, Jo
Strang, Gavin


Roberts, Allan (Bootle)
Taylor, Mrs Ann (Dewsbury)


Robertson, George
Thompson, Jack (Wansbeck)


Robinson, Geoffrey
Turner, Dennis


Rogers, Allan
Wall, Pat


Rooker, Jeff
Walley, Joan


Ross, Ernie (Dundee W)
Wardell, Gareth (Gower)


Rowlands, Ted
Wareing, Robert N.


Ruddock, Joan
Welsh, Andrew (Angus E)


Salmond, Alex
Wigley, Dafydd


Sedgemore, Brian
Williams, Rt Hon Alan


Sheerman, Barry
Williams, Alan W. (Carm'then)


Sheldon, Rt Hon Robert
Winnick, David


Shore, Rt Hon Peter
Wise, Mrs Audrey


Short, Clare
Worthington, Tony


Skinner, Dennis
Wray, Jimmy


Smith, Andrew (Oxford E)
Young, David (Bolton SE)


Smith, C. (Isl'ton &amp; F'bury)



Snape, Peter
Tellers for the Ayes:


Soley, Clive
Mr. Frank Haynes and


Spearing, Nigel
Mr. Alun Michael.




NOES


Aitken, Jonathan
Clark, Dr Michael (Rochford)


Alexander, Richard
Clark, Sir W. (Croydon S)


Alison, Rt Hon Michael
Clarke, Rt Hon K. (Rushcliffe)


Allason, Rupert
Colvin, Michael


Amery, Rt Hon Julian
Conway, Derek


Amess, David
Coombs, Anthony (Wyre F'rest)


Amos, Alan
Coombs, Simon (Swindon)


Arbuthnot, James
Cope, Rt Hon John


Arnold, Jacques (Gravesham)
Cormack, Patrick


Ashby, David
Couchman, James


Aspinwall, Jack
Cran, James


Atkins, Robert
Critchley, Julian


Baker, Nicholas (Dorset N)
Currie, Mrs Edwina


Baldry, Tony
Curry, David


Banks, Robert (Harrogate)
Davies, Q. (Stamf'd &amp; Spald'g)


Barnes, Mrs Rosie (Greenwich)
Davis, David (Boothferry)


Batiste, Spencer
Day, Stephen


Bendall, Vivian
Devlin, Tim


Bennett, Nicholas (Pembroke)
Dickens, Geoffrey


Bevan, David Gilroy
Dicks, Terry


Biffen, Rt Hon John
Dorrell, Stephen


Blackburn, Dr John G.
Douglas-Hamilton, Lord James


Blaker, Rt Hon Sir Peter
Dover, Den


Bonsor, Sir Nicholas
Durant, Tony


Boscawen, Hon Robert
Eggar, Tim


Boswell, Tim
Emery, Sir Peter


Bottomley, Peter
Evans, David (Welwyn Hatf'd)


Bottomley, Mrs Virginia
Evennett, David


Bowden, A (Brighton K'pto'n)
Fallon, Michael


Bowden, Gerald (Dulwich)
Favell, Tony


Bowis, John
Fenner, Dame Peggy


Boyson, Rt Hon Dr Sir Rhodes
Field, Barry (Isle of Wight)


Braine, Rt Hon Sir Bernard
Finsberg, Sir Geoffrey


Brandon-Bravo, Martin
Fishburn, John Dudley


Brazier, Julian
Fookes, Miss Janet


Bright, Graham
Forsyth, Michael (Stirling)


Brooke, Rt Hon Peter
Fowler, Rt Hon Norman


Brown, Michael (Brigg &amp; Cl't's)
Fox, Sir Marcus


Browne, John (Winchester)
Franks, Cecil


Buck, Sir Antony
Freeman, Roger


Budgen, Nicholas
French, Douglas


Burns, Simon
Gale, Roger


Burt, Alistair
Gardiner, George


Butcher, John
Gill, Christopher


Butler, Chris
Gilmour, Rt Hon Sir Ian


Butterfill, John
Glyn, Dr Alan


Carlisle, John, (Luton N)
Goodhart, Sir Philip


Carlisle, Kenneth (Lincoln)
Goodlad, Alastair


Carrington, Matthew
Goodson-Wickes, Dr Charles


Carttiss, Michael
Gorman, Mrs Teresa


Cartwright, John
Gorst, John


Cash, William
Gow, Ian


Chapman, Sydney
Gower, Sir Raymond


Churchill, Mr
Grant, Sir Anthony (CambsSW)


Clark, Hon Alan (Plym'th S'n)
Greenway, Harry (Ealing N)





Greenway, John (Ryedale)
Marshall, Michael (Arundel)


Gregory, Conal
Martin, David (Portsmouth S)


Griffiths, Sir Eldon (Bury St E')
Mates, Michael


Griffiths, Peter (Portsmouth N)
Maude, Hon Francis


Grist, Ian
Maxwell-Hyslop, Robin


Ground, Patrick
Mayhew, Rt Hon Sir Patrick


Grylls, Michael
Mellor, David


Gummer, Rt Hon John Selwyn
Meyer, Sir Anthony


Hamilton, Hon Archie (Epsom)
Miller, Sir Hal


Hamilton, Neil (Tatton)
Mills, Iain


Hampson, Dr Keith
Miscampbell, Norman


Hanley, Jeremy
Mitchell, Andrew (Gedling)


Hannam, John
Mitchell, David (Hants NW)


Hargreaves, A. (B'ham H'll Gr')
Moate, Roger


Hargreaves, Ken (Hyndburn)
Monro, Sir Hector


Harris, David
Morris, M (N'hampton S)


Haselhurst, Alan
Morrison, Sir Charles


Hayes, Jerry
Morrison, Rt Hon P (Chester)


Hayhoe, Rt Hon Sir Barney
Moss, Malcolm


Hayward, Robert
Mudd, David


Heathcoat-Amory, David
Neale, Gerrard


Heddle, John
Needham, Richard


Heseltine, Rt Hon Michael
Nelson, Anthony


Hicks, Mrs Maureen (Wolv' NE)
Nicholls, Patrick


Higgins, Rt Hon Terence L.
Nicholson, David (Taunton)


Hind, Kenneth
Onslow, Rt Hon Cranley


Hogg, Hon Douglas (Gr'th'm)
Oppenheim, Phillip


Hordern, Sir Peter
Owen, Rt Hon Dr David


Howard, Michael
Page, Richard


Howarth, Alan (Strat'd-on-A)
Paice, James


Howarth, G. (Cannock &amp; B'wd)
Parkinson, Rt Hon Cecil


Howell, Rt Hon David (G'dford)
Patnick, Irvine


Howell, Ralph (North Norfolk)
Patten, Chris (Bath)


Hughes, Robert G. (Harrow W)
Patten, John (Oxford W)


Hunt, David (Wirral W)
Pattie, Rt Hon Sir Geoffrey


Hunt, John (Ravensbourne)
Pawsey, James


Hunter, Andrew
Peacock, Mrs Elizabeth


Irvine, Michael
Porter, Barry (Wirral S)


Irving, Charles
Portillo, Michael


Jack, Michael
Powell, William (Corby)


Jackson, Robert
Price, Sir David


Janman, Tim
Raffan, Keith


Jessel, Toby
Raison, Rt Hon Timothy


Johnson Smith, Sir Geoffrey
Rathbone, Tim


Jones, Gwilym (Cardiff N)
Redwood, John


Jopling, Rt Hon Michael
Renton, Tim


Kellett-Bowman, Dame Elaine
Rhodes James, Robert


Key, Robert
Riddick, Graham


King, Roger (B'ham N'thfield)
Ridley, Rt Hon Nicholas


Kirkhope, Timothy
Ridsdale, Sir Julian


Knapman, Roger
Rifkind, Rt Hon Malcolm


Knight, Greg (Derby North)
Roberts, Wyn (Conwy)


Knight, Dame Jill (Edgbaston)
Roe, Mrs Marion


Knowles, Michael
Rost, Peter


Knox, David
Rowe, Andrew


Lang, Ian
Ryder, Richard


Latham, Michael
Sackville, Hon Tom


Lawrence, Ivan
Sainsbury, Hon Tim


Leigh, Edward (Gainsbor'gh)
Sayeed, Jonathan


Lennox-Boyd, Hon Mark
Scott, Nicholas


Lester, Jim (Broxtowe)
Shaw, David (Dover)


Lightbown, David
Shaw, Sir Michael (Scarb')


Lloyd, Sir Ian (Havant)
Shelton, William (Streatham)


Lloyd, Peter (Fareham)
Shephard, Mrs G. (Norfolk SW)


Lord, Michael
Shepherd, Colin (Hereford)


Luce, Rt Hon Richard
Shepherd, Richard (Aldridge)


McCrindle, Robert
Shersby, Michael


Macfarlane, Sir Neil
Sims, Roger


MacGregor, Rt Hon John
Skeet, Sir Trevor


Maclean, David
Smith, Sir Dudley (Warwick)


McLoughlin, Patrick
Smith, Tim (Beaconsfield)


McNair-Wilson, Sir Michael
Speed, Keith


McNair-Wilson, P. (New Forest)
Speller, Tony


Madel, David
Spicer, Sir Jim (Dorset W)


Malins, Humfrey
Spicer, Michael (S Worcs)


Mans, Keith
Stanbrook, Ivor


Maples, John
Stanley, Rt Hon John


Marland, Paul
Steen, Anthony


Marlow, Tony
Stern, Michael


Marshall, John (Hendon S)
Stevens, Lewis






Stewart, Allan (Eastwood)
Wakeham, Rt Hon John


Stewart, Andy (Sherwood)
Walker, Bill (T'side North)


Stewart, Ian (Hertfordshire N)
Walker, Rt Hon P. (W'cester)


Stokes, Sir John
Waller, Gary


Stradling Thomas, Sir John
Walters, Sir Dennis


Sumberg, David
Ward, John


Summerson, Hugo
Wardle, Charles (Bexhill)


Tapsell, Sir Peter
Watts, John


Taylor, Ian (Esher)
Wells, Bowen


Taylor, John M (Solihull)
Wheeler, John


Taylor, Teddy (S'end E)
Whitney, Ray


Tebbit, Rt Hon Norman
Widdecombe, Ann


Temple-Morris, Peter
Wiggin, Jerry


Thatcher, Rt Hon Margaret
Wilkinson, John


Thompson, D. (Calder Valley)
Wilshire, David


Thompson, Patrick (Norwich N)
Winterton, Mrs Ann


Thorne, Neil
Winterton, Nicholas


Thornton, Malcolm
Wolfson, Mark


Thurnham, Peter
Wood, Timothy


Townend, John (Bridlington)
Woodcock, Mike


Townsend, Cyril D. (B'heath)
Yeo, Tim


Tracey, Richard
Young, Sir George (Acton)


Tredinnick, David
Younger, Rt Hon George


Trippier, David



Twinn, Dr Ian
Tellers for the Noes:


Vaughan, Sir Gerard
Mr. Tristan Garel-Jones and


Viggers, Peter
Mr. Michael Neubert.


Waddington, Rt Hon David

Question Accordingly negatived.

Main Question put:—

The House dividend: Ayes 311, Noes 34.

Division No. 449]
[10.15 pm


AYES


Alexander, Richard
Carlisle, John, (Luton N)


Alison, Rt Hon Michael
Carlisle, Kenneth (Lincoln)


Amery, Rt Hon Julian
Carrington, Matthew


Amess, David
Carttiss, Michael


Amos, Alan
Cash, William


Arbuthnot, James
Chapman, Sydney


Arnold, Jacques (Gravesham)
Churchill, Mr


Ashby, David
Clark, Hon Alan (Plym'th S'n)


Aspinwall, Jack
Clark, Dr Michael (Rochford)


Atkins, Robert
Clark, Sir W. (Croydon S)


Baker, Nicholas (Dorset N)
Clarke, Rt Hon K. (Rushcliffe)


Baldry, Tony
Colvin, Michael


Banks, Robert (Harrogate)
Conway, Derek


Barnes, Mrs Rosie (Greenwich)
Coombs, Anthony (Wyre F'rest)


Batiste, Spencer
Coombs, Simon (Swindon)


Bendall, Vivian
Cope, Rt Hon John


Bennett, Nicholas (Pembroke)
Cormack, Patrick


Bevan, David Gilroy
Couchman, James


Biffen, Rt Hon John
Cran, James


Blackburn, Dr John G.
Currie, Mrs Edwina


Blaker, Rt Hon Sir Peter
Curry, David


Bonsor, Sir Nicholas
Davies, Q. (Stamf'd &amp; Spald'g)


Boscawen, Hon Robert
Davis, David (Boothferry)


Boswell, Tim
Day, Stephen


Bottomley, Peter
Devlin, Tim


Bottomley, Mrs Virginia
Dickens, Geoffrey


Bowden, A (Brighton K'pto'n)
Dicks, Terry


Bowden, Gerald (Dulwich)
Dorrell, Stephen


Bowis, John
Douglas-Hamilton, Lord James


Boyson, Rt Hon Dr Sir Rhodes
Durant, Tony


Braine, Rt Hon Sir Bernard
Eggar, Tim


Brandon-Bravo, Martin
Emery, Sir Peter


Brazier, Julian
Evans, David (Welwyn Hatf'd)


Bright, Graham
Evennett, David


Brooke, Rt Hon Peter
Fallon, Michael


Brown, Michael (Brigg &amp; Cl't's)
Favell, Tony


Browne, John (Winchester)
Fenner, Dame Peggy


Buck, Sir Antony
Field, Barry (Isle of Wight)


Budgen, Nicholas
Finsberg, Sir Geoffrey


Burns, Simon
Fishburn, John Dudley


Burt, Alistair
Fookes, Miss Janet


Butcher, John
Forsyth, Michael (Stirling)


Butler, Chris
Fowler, Rt Hon Norman


Butterfill, John
Fox, Sir Marcus





Franks, Cecil
McCrindle, Robert


Freeman, Roger
Macfarlane, Sir Neil


French, Douglas
MacGregor, Rt Hon John


Gale, Roger
Maclean, David


Gardiner, George
McLoughlin, Patrick


Gill, Christopher
McNair-Wilson, Sir Michael


Gilmour, Rt Hon Sir Ian
McNair-Wilson, P. (New Forest)


Glyn, Dr Alan
Madel, David


Goodhart, Sir Philip
Malins, Humfrey


Goodlad, Alastair
Mans, Keith


Goodson-Wickes, Dr Charles
Maples, John


Gorman, Mrs Teresa
Marland, Paul


Gorst, John
Marlow, Tony


Gow, Ian
Marshall, John (Hendon S)


Gower, Sir Raymond
Marshall, Michael (Arundel)


Grant, Sir Anthony (CambsSW)
Martin, David (Portsmouth S)


Greenway, Harry (Ealing N)
Mates, Michael


Greenway, John (Ryedale)
Maude, Hon Francis


Gregory, Conal
Maxwell-Hyslop, Robin


Griffiths, Sir Eldon (Bury St E')
Mayhew, Rt Hon Sir Patrick


Griffiths, Peter (Portsmouth N)
Mellor, David


Ground, Patrick
Meyer, Sir Anthony


Grylls, Michael
Miller, Sir Hal


Gummer, Rt Hon John Selwyn
Mills, Iain


Hamilton, Hon Archie (Epsom)
Mitchell, Andrew (Gedling)


Hamilton, Neil (Tatton)
Mitchell, David (Hants NW)


Hampson, Dr Keith
Moate, Roger


Hanley, Jeremy
Monro, Sir Hector


Hannam, John
Morris, M (N'hampton S)


Hargreaves, A. (B'ham H'll Gr')
Morrison, Sir Charles


Hargreaves, Ken (Hyndburn)
Morrison, Rt Hon P (Chester)


Harris, David
Moss, Malcolm


Haselhurst, Alan
Mudd, David


Hayes, Jerry
Neale, Gerrard


Hayhoe, Rt Hon Sir Barney
Needham, Richard


Hayward, Robert
Nelson, Anthony


Heathcoat-Amory, David
Nicholls, Patrick


Heddle, John
Nicholson, David (Taunton)


Hicks, Mrs Maureen (Wolv' NE)
Onslow, Rt Hon Cranley


Higgins, Rt Hon Terence L.
Oppenheim, Phillip


Hind, Kenneth
Owen, Rt Hon Dr David


Hogg, Hon Douglas (Gr'th'm)
Page, Richard


Hordern, Sir Peter
Paice, James


Howard, Michael
Parkinson, Rt Hon Cecil


Howarth, Alan (Strat'd-on-A)
Patnick, Irvine


Howarth, G. (Cannock &amp; B'wd)
Patten, Chris (Bath)


Howell, Rt Hon David (G'dford)
Patten, John (Oxford W)


Hughes, Robert G. (Harrow W)
Pattie, Rt Hon Sir Geoffrey


Hunt, David (Wirral W)
Pawsey, James


Hunt, John (Ravensbourne)
Peacock, Mrs Elizabeth


Hunter, Andrew
Porter, Barry (Wirral S)


Irvine, Michael
Portillo, Michael


Irving, Charles
Powell, William (Corby)


Jack, Michael
Price, Sir David


Jackson, Robert
Raffan, Keith


Janman, Tim
Raison, Rt Hon Timothy


Jessel, Toby
Rathbone, Tim


Johnson Smith, Sir Geoffrey
Redwood, John


Jones, Gwilym (Cardiff N)
Renton, Tim


Jopling, Rt Hon Michael
Rhodes James, Robert


Kellett-Bowman, Dame Elaine
Riddick, Graham


Key, Robert
Ridley, Rt Hon Nicholas


King, Roger (B'ham N'thfield)
Ridsdale, Sir Julian


Kirkhope, Timothy
Rifkind, Rt Hon Malcolm


Knapman, Roger
Roberts, Wyn (Conwy)


Knight, Greg (Derby North)
Roe, Mrs Marion


Knight, Dame Jill (Edgbaston)
Rost, Peter


Knowles, Michael
Rowe, Andrew


Knox, David
Ryder, Richard


Lang, Ian
Sackville, Hon Tom


Latham, Michael
Sainsbury, Hon Tim


Lawrence, Ivan
Sayeed, Jonathan


Leigh, Edward (Gainsbor'gh)
Scott, Nicholas


Lennox-Boyd, Hon Mark
Shaw, David (Dover)


Lester, Jim (Broxtowe)
Shaw, Sir Michael (Scarb')


Lightbown, David
Shelton, William (Streatham)


Lloyd, Sir Ian (Havant)
Shephard, Mrs G. (Norfolk SW)


Lloyd, Peter (Fareham)
Shepherd, Colin (Hereford)


Lord, Michael
Shepherd, Richard (Aldridge)


Luce, Rt Hon Richard
Shersby, Michael






Sims, Roger
Tracey, Richard


Skeet, Sir Trevor
Tredinnick, David


Smith, Sir Dudley (Warwick)
Trippier, David


Smith, Tim (Beaconsfield)
Twinn, Dr Ian


Speed, Keith
Vaughan, Sir Gerard


Speller, Tony
Viggers, Peter


Spicer, Sir Jim (Dorset W)
Waddington, Rt Hon David


Spicer, Michael (S Worcs)
Wakeham, Rt Hon John


Stanbrook, Ivor
Walker, Bill (T'side North)


Stanley, Rt Hon John
Walker, Rt Hon P. (W'cester)


Steen, Anthony
Waller, Gary


Stern, Michael
Ward, John


Stevens, Lewis
Wardle, Charles (Bexhill)


Stewart, Allan (Eastwood)
Watts, John


Stewart, Andy (Sherwood)
Wells, Bowen


Stewart, Ian (Hertfordshire N)
Wheeler, John


Stokes, Sir John
Whitney, Ray


Stradling Thomas, Sir John
Widdecombe, Ann


Sumberg, David
Wiggin, Jerry


Summerson, Hugo
Wilkinson, John


Tapsell, Sir Peter
Wilshire, David


Taylor, Ian (Esher)
Winterton, Mrs Ann


Taylor, John M (Solihull)
Winterton, Nicholas


Taylor, Teddy (S'end E)
Wolfson, Mark


Tebbit, Rt Hon Norman
Wood, Timothy


Temple-Morris, Peter
Woodcock, Mike


Thatcher, Rt Hon Margaret
Yeo, Tim


Thompson, D. (Calder Valley)
Young, Sir George (Acton)


Thompson, Patrick (Norwich N)
Younger, Rt Hon George


Thorne, Neil



Thornton, Malcolm
Tellers for the Ayes:


Thurnham, Peter
Mr. Tristan Garel-Jones and


Townend, John (Bridlington)
Mr. Michael Neubert.


Townsend, Cyril D. (B'heath)





NOES


Abbott, Ms Diane
Jones, Ieuan (Ynys Môn)


Banks, Tony (Newham NW)
Livingstone, Ken


Barnes, Harry (Derbyshire NE)
Madden, Max


Benn, Rt Hon Tony
Mahon, Mrs Alice


Bidwell, Sydney
Michie, Bill (Sheffield Heeley)


Brown, Ron (Edinburgh Leith)
Parry, Robert


Campbell-Savours, D. N.
Patchett, Terry


Clay, Bob
Primarolo, Dawn


Clwyd, Mrs Ann
Salmond, Alex


Cohen, Harry
Sedgemore, Brian


Cryer, Bob
Skinner, Dennis


Cunliffe, Lawrence
Wall, Pat


Ewing, Mrs Margaret (Moray)
Welsh, Andrew (Angus E)


Fields, Terry (L'pool B G'n)
Wigley, Dafydd


Flannery, Martin
Wise, Mrs Audrey


Gordon, Mildred



Grant, Bernie (Tottenham)
Tellers for the Noes:


Heffer, Eric S.
Mr. Eddie Loyden and


Hughes, John (Coventry NE)
Mr. Dave Nellist.

Question accordingly agreed to.

Resolved,
That this House approves the Statement on the Defence Estimates 1988 contained in Cm. 344.

Trade Barriers (European Community)

Motion made, and Question proposed, That this House do now adjourn. —[Mr. Fallon.]

Mr. Phillip Oppenheim: I begin by expressing a measure of sympathy for my hon. Friend the Minister who is to reply to the debate. He is having to defend a position to which the Government are acquiescing but which goes against virtually all their stated objectives of encouraging consumer choice, deregulating and fostering industrial efficiency.
Although we have heard a great deal of noise over the past year or so about 1992 and the opening of the European market, we have heard less about the corollary of that, which is that many civil servants within the European Commission believe that as we open our internal market we should steadily close the external market to prevent non-EEC manufacturers from taking advantage of our more open internal market. Therefore, as we are seeing barriers within the European Community being broken down, we are seeing a fortress-Europe mentality being introduced by many within the EEC establishment.
For example, many car manufacturers are already talking about introducing a 15 per cent. EEC import quota for Japanese cars after 1992 to replace the series of national quotas which currently exist. Britain now has an 11 per cent. import quota for Japanese cars, France has a 3 per cent. quota and Spain and Italy allow only a few thousand Japanese cars to be imported each year. Most of the other EEC countries have no quotas or import restrictions. Therefore, a 15 per cent. quota in 1992 will in many cases mean less consumer choice and more protection than at present.
Apart from the quotas being proposed there is already a wide range of EEC-wide quotas. The EEC currently imposes quotas on imports of compact disc machines, videos and televisions. Significantly and topically, there are also quotas on imports of steel. It is almost impossible for non-EEC producers to import steel into the European Community. That has severe ramifications for steel-consuming industries within the EEC.
Apart from the quotas already in existence and those being proposed and taken seriously within the Commission, the increasing use of what I consider to be spurious anti-dumping duties by the Commission is dangerous. In recent years, the Commission has imposed severe anti-dumping duties on imports of photocopiers, computer printers and electronic typewriters. I understand that it is proposing duties on imports of facsimile machines and microchips.
The 1982 regulations, which are the basis for the anti-dumping regulations, have been drawn so widely that the Commission can say that almost anything is dumping. I should like to draw the Minister's attention to two particular examples. The first concerns constructed prices. Rather than send its investigators to Japan and Europe to find out at what prices the products are being sold, the Commission artificially constructs prices. The structures by which it does so are different in Japan from those in Europe. In Japan, the price includes much of the overheads and marketing costs, but in Europe it does not. That obviously makes the European cost at which the


Japanese are selling far lower than that of their home market, thereby making a large dumping margin when in reality there is none.
The second example is the system whereby the Commission can say that any company or industry selling products on the EC market at a loss is automatically dumping. It is well known that start-up companies, especially when they are opening a high-volume factory, may for the first year or two not reach full economic volumes. By the Commission's regulations, they will be selling their products at a loss on the European market and will therefore be dumping. A penal anti-dumping duty will be imposed on them, with the result that the Commission will have the power to strangle almost any new non-EC entrant to the market at birth.
In its defence, the Commission says that the European Court has ruled that it is imposing its anti-dumping duties legally, which is right. Companies that fought the Commission in the European Court found that the court expressed much sympathy but said that the Commission was working well within its own regulations, even though they are drawn up unfairly.
The other excuse that is used is that the anti-dumping regulations fall within the general agreement on tariffs and trade. The problem is that the GATT guidelines are drawn so widely and vaguely that almost any regulations would fall within their parameters. I do not consider that to be a defence to the Commission's stance.
I have mentioned these problems to European industrialists, European civil servants and the many defenders of protectionism, including many Socialists. In their more candid moments, they admit that these measures are blatantly protectionist, but their main justification for them is that the Japanese have been protectionist so we must be protectionist ourselves. Everyone knows that the Japanese were very protectionist in the 1950s and 1960s, but we fool ourselves if we believe that Britain, Europe and the United States were not and are not extremely protectionist in a variety of ways. The fundamental difference is that, while the Japanese are making genuine efforts to reduce their protectionist barriers, we in Europe, and to a large extent America, are erecting ours.
One of the reasons why people mistakenly believe that Japan is a protectionist country is that the Japanese market is difficult in a variety of ways and many western manufacturers have come to grief by trying to sell the wrong product and not persevering. The Japanese, with a relatively small home market, have had to sell their products in the west, whereas for many western manufacturers it has been far easier to sell into the linguistically and culturally similar markets in Europe and the United States, or to old colonial markets, which were protected and offered substantial advantages. There has not been the incentive for western manufacturers to sell into the Japanese market in the same way that there has been a necessity for Japanese manufacturers to sell into western markets. That is one reason why Japanese export penetration into Europe has been higher than western penetration into Japanese markets. Anyone who studies the Japanese market will find many examples of western companies, producing the right product at the right price, that have done extremely well.
Before being fortunate enough to be elected to this place, I worked in the information technology industry, editing a business consumer magazine which covered

many of the products that are subject to EEC Commission anti-dumping investigations or have had duties imposed on them. I know that the Japanese succeeded primarily because they produced the right products at the right price and marketed them creatively.
The Japanese have done well with photocopiers because they produced in volume. Because they did that, they were able to incorporate features in their machines which were formerly the preserve of the top name products. The Japanese also marketed creatively, cutting costs by introducing dealer marketing rather than direct sales. Many European industries and even Xerox, the American-owned company, were slow. They did not sell the right products and were not agile in marketing. The Japanese have succeeded not through predatory guile but by producing and selling the right products at the right price and delivering on time.
Unfortunately, it is far easier for European manufacturers who have failed in the Japanese market, and failed against Japanese competition in their home markets, to whinge, whine and complain about unfair trade practices. If they can palm the blame off on to the Japanese, it obviously means that they are not at fault.
The other major argument to justify protectionism is that protectionist barriers forced the Japanese to set up in Europe. Examples in Britain which have recently been given much publicity are the Nissan car factory in the north-east and a variety of typewriter and office equipment factories. I make it clear that I welcome with open arms foreign investment of all types. If that investment is represented only by assembly plants, that is better than nothing. If that foreign investment comes into this country only to jump over import barriers, the rest of the economy must pay the price.
I should like to quote Nissan as an example. Obviously, it has been of great benefit in the north-east and people there have warmly welcomed the Nissan factory. The company has also been of benefit in a wider sense by its example to the British economy in general. But it is important to recognise the disadvantages. Although it may deny this, Nissan came to Britain largely because of Britain's 11 per cent. import quota on Japanese cars, the so-called gentleman's agreement which was introduced in 1976 by a Labour Government, supposedly to give Austin-Rover a breathing space. However, that plan does not seem to have done much good. I believe that it is a good argument against protectionism.
Although Nissan brought many benefits in its train, the quotas which brought the company here in the first place have resulted in an annual extra cost by distorting the market for United Kingdom car buyers by about £1 million a year. That sum represents the costs over and above the costs that should be paid by British industry which are diverted from efficient and productive industry into less efficient, less productive industry.
Import barriers can also be damaging to the rest of the economy because they limit choice. Once again, I shall adduce Nissan as a good example. Nissan produces in relatively low volumes in this country. It has to have longer product runs to make those volumes competitive and economical. The company cannot introduce in the British market the new models that it would introduce in a free market. For example, the Nissan Bluebird, which is produced in the north-east, is. an obsolete model. In far eastern markets, Nissan introduced a new Bluebird more than a year ago. Nissan denies this, but the fact is that,


because the company needs long production runs to make its plants economic, it cannot introduce new models as quickly as it might otherwise do, so choice is limited.
Exactly the same has happened with the Rover Group, which has an agreement to assemble certain Honda products. Most of the group's product line are Honda-designed and developed.
Rover produces a car called the Rover 200 that is effectively the same car as one that it assembles for Honda, which is called the Honda Ballade. That, in turn, is the old Honda Civic model, which has long since been replaced in other markets but because the Rover Group had to have long runs of this model it will be unable to replace it until next year. By limiting consumer choice, such practices make our market less competitive, and that damages not only consumers but the industry.

Mr. Christopher Gill: My hon. Friend said that the Nissan car company came to this country because in doing so it was able to leap the protection barrier. Would he say that the grants that were made available to this company when it came here were not significant or did not enter into the company's thinking when it planned to open the new plant?

Mr. Oppenheim: My hon. Friend is right. I said that import quotas were one of the reasons why the company came here, but I agree that another was generous assistance from the Government. Furthermore, it found that Britain, compared to other countries, was a good place in which to do business, and we should recognise that. However, import quotas were a major element when it made the decision to come here, although the company might deny that.

Mr. Gill: rose——

Mr. Oppenheim: I hope that my hon. Friend will forgive me if I do not give way again, but I have to leave enough time for my hon. Friend the Minister to give me a considered reply.
I know that the Minister is concerned about screwdriver and anti-dumping duties. On top of proposing a series of protectionist duties, which, to an extent, encourage Japanese industry into Europe, now that the Japanese have come to Europe, the Commission is saying that they must use a high proportion of local components. That is not necessarily in the interest of the assembling country, and it is not always possible for the companies to find high quality components locally. That is damaging, and it compounds the damage already done by the protectionism that is the result of many of the Commission's policies.
The casual listener—I accept that there are not many casual listeners here tonight, but I trust that I am not immodest in hoping that some people will read this debate —may think that I am arguing on behalf of Japanese industry. I should like to emphasise that I am not. I am arguing for our industry because I believe that protectionism damages our industry in a number of ways. First, it increases prices, often of industrial feedstocks. For instance, the import quotas on non-EEC steel mean that our steel consumers, which include the car industry, have to pay more for their steel than they would if they were buying it in another country.
Another good example are microchips. Not only has the EEC placed anti-dumping duties on Japanese chips, but there is already a ludicrous system whereby the import duty on non-EEC chips is higher than the import duty on fully built computer boards and computers. That means that it is often far cheaper to import fully built-up boards than to import the chips, which can be used to build products here. That is largely the result of lobbying by the big European chip makers—Siemens, Philips, Thomson and SGS ATES. The result is that assemblers of products using chips, such as the Amstrad company, find it cheaper to import fully made-up products, whereas, if the duties were equal, they would find it more economic and preferable to assemble the products here.
Protectionism not only increases the cost of feedstock to our industry, but indirectly helps the Japanese, by creating artificially high markets from which they are able to profit. The Japanese make huge profits out of selling cars to the protected European markets—Britain, France, Italy and Spain—and those profits are repatriated to Japan, so that helps. Ultimately, protectionism does not help the industries that it is supposed to protect. It puts off the time when those industries have to sort out their own houses and become efficient and effective. Thus, it compounds and continues their inefficiencies. If a company cannot compete in its home market with the Japanese, how does it expect to be able to compete in overseas export markets?
There is a further danger in protectionism because, if we allow ourselves to be convinced by failed European industrialists that the Japanese have succeeded as a result of predatory trading practices, we shall have no incentive to improve ourselves and to learn the many valuable lessons that they can teach us to help us sort out our industrial problems. Some of the real reasons for the success of the Japanese are not so much predatory guile, but rather the fact that, ever since the war, they have had consistently right of centre Governments who have followed extremely sound economic policies. They have a first-rate education system which churns out a highly skilled and literate work force, and the country as a whole has not suffered from Socialist anti-business and anti-profit attitudes, but has a solidly and robustly pro-business, pro-enterprise ethos.
I therefore urge my hon. Friend to look carefully at the protectionism which exists and is being built up by the Commission because that protectionism runs counter to the Government's avowed policy of deregulation, industrial efficiency and consumer choice. I accept that my hon. Friend probably does not know a great deal about the protectionism because much of it that arises in the Commission probably comes on to his desk or those of his colleagues with a little note from civil servants saying, "This is all right. Sign." Many anti-dumping orders are probably signed without my hon. Friend and his colleagues knowing what they are signing. I am sure that, if they realised what they were signing, they might well have second thoughts. Ultimately, it is extremely dangerous for European industry, if it knows that it has an easy path, to go whingeing to the Commission asking for protection rather than sorting itself out.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Francis Maude): I congratulate my hon. Friend the Member for Amber Valley (Mr. Oppenheim), first, on having gained this opportunity and, secondly, on having used it so skilfully and, in his usual measured way, having deployed a formidable and detailed range of knowledge of a difficult subject. He will understand that one or two other matters were occupying my mind today, but, none the less, I am grateful to have the opportunity to reply to the serious and well thought out points that he has made.
There is not all that much difference of opinon between my hon. Friend and me. He knows that the Governments stance is essentially a liberal one in respect of trade. We are not a protectionist Government. We reject protectionism, for very much the reasons that he set out. He talked about the way in which the single European market is likely to develop; and the way in which it is perceived to be developing is as important as the way in which it does develop. There is no doubt that it is crucial to the long-term success of completing the single market that it conducts its external trade relations after 1992 in a sensible way.
With the United States and Japan, the Community is one of the world's three great trading blocs, and that imposes great responsibilities which we have to live up to. We are already deep into the Uruguay round of trade negotiations which aims to reinforce the system by which the international rules of trade are multilaterally agreed and applied. We are seeking major reforms in that system so that it can better serve the interests of all trading nations in the decades ahead. The Community, and especially the United Kingdom Government, are well aware of the benefits that we draw from open trade in terms of growth, investment, technological advance and consumer satisfaction and we have therefore made it clear right from the start that, in our view, there can be no question of a "fortress Europe" or of us using the completion of the single market to raise external trade barriers. That would make no sense and would tend to isolate the Community from developments elsewhere.
The Secretary of State made our position absolutely clear in the White Paper, "The Department for Enterprise", which he published in January. It is worth pointing out that the European Council strongly reaffirmed the same principle at Hanover in June of this year, as did my right hon. Friend the Prime Minister in her speech at Bruges last month, but, as I have said before, it is not just what the Community does; it is how it is perceived that matters.
A fear is often expressed in countries outside the Community that the development of the single market will be paralleled by increased protection against outside competition, especially from the United States and Japan. I have recently visited two or three countries in the far east, where I found that it was accepted as a certainty that that would happen. I hope that I managed to instil a doubt in the minds of those to whom I spoke. Their preconception is very much that Europe is turning itself inwards and closing itself to trade from outside. We must resist such moves. The single market process must help to reduce external barriers, not increase them. Raising Community barriers would be self-defeating. It would encourage

inefficiency and a lack of competitiveness. Whatever we were to gain at a cost to consumers and our economies, we would lose internationally.
There is a real danger, if our trading partners misunderstand our intentions, that there could develop a retaliatory spiral of protectionism, with the various trading blocs, which are increasingly developing around the globe, erecting ever more severe trade barriers. I do not need to spell out the disastrous consequences that that would hold. We could suddenly find that there was a clamp on world trade, with serious effects on economic growth worldwide. I hope that all our partners in the Community will express as robustly as we do a commitment to a liberal policy in trade. The consequences of doing otherwise could be severe.
There is already misinterpretation on this side of the Atlantic of the American Trade Bill. It is interpreted as being more protectionist than it is. There is misinterpretation in the United States of what is happening in Europe. Similarly, there is misinterpretation in the far east. Whenever uncertainty and discordant voices emerge from one of the trade blocs, there is a tendency for our trading partners to make an interpretation that is in the worst possible light. There is thus the danger of a retaliatory round of trade barriers being erected. That could happen suddenly and without notice, with serious consequences for world trade.
It is clear that the removal of the internal barriers in the Community will bring great benefits to nationals of other countries and to the subsidiaries of foreign firms that are established in the Community. They will profit from the single market in the same way as Community nationals. That gives the lie to some of the more exaggerated fears that have been expressed, especially in the United States press. Foreign-based firms play a dynamic part in the economies of all the member states and we need to encourage the dynamism, not seek to repress it.
We can look to our partners to continue the process of liberalisation, and we must do so. We are doing this already in the way in which we are negotiating in the GATT to extend the multinational rules to services, with the aim of progressively opening services markets worldwide. We in the Community as a whole will continue with this process. The Uruguay round provides the mechanism with which it will be possible for the Community, in an appropriate instance, to claim credit for the external liberalisation that will occur with the completion of the single market.
My hon. Friend the Member for Amber Valley referred to imports. It is part of the Government's policy to provide an economic climate that promotes the enterprise and prosperity that will enable both the manufacturing and service sectors to compete in world markets. A policy of open markets—of free but fair trade—is an indispensable element in this policy. Imports at fair market prices provide both a significant input to our manufacturing effort and a competitive spur, which help to keep costs down for both consumers and industrial users and to widen choice.
Since 1985, as part of our initiative of competition, we have been reviewing the justification for the voluntary restraint agreements that have typically been concluded between a United Kingdom industry and its counterpart overseas. I answered written questions on 30 March and subsequently which were tabled by my hon. Friend the Member for Darlington (Mr. Fallon), whom I am


delighted to see on the Government Front Bench. I am sure that the whole House will wish to join me in congratulating him on his elevation to the Whips' office, even if, as a result, we shall be denied the pleasure of his contributions to our debates for the time being. As I explained in my answer to the questions that he so pertinently asked, in assessing the costs and benefits to the United Kingdom economy, we concluded that in most cases such arrangements were not in our interests, and we advised the industry concerned accordingly. But in the cases in which we believed that there was some justification, we continue to keep those arrangements under review.
My hon. Friend spoke about anti-dumping. He is absolutely right that anti-dumping measures must not be used as an easy way out. When complaints about dumping are made, we have to ensure that the proper procedures are followed. In case my hon. Friend has any doubts about this, I can assure him that I have at no stage signed an

anti-dumping order, whether I have read it or not. And I know that my hon. Friend the Minister for Trade, before whom these matters may come, exercises great diligence and care before committing his name to anything.
We need to ensure that these processes are not abused and that, when complaints are made, the proper procedures are followed. For the most part, we believe that that happens. The danger is that, if the procedures are thought to be abused—there is no doubt that in some parts of the world they are thought to be used too freely, and conclusions that meet the anxieties of the protectionist lobby are thought to be too freely reached—great damage will be done to the reputation of the European Community, which is based on economic liberalism.
It was right of my hon. Friend eloquently to raise the other side of the coin. Too often, for Governments and public authorities generally——

The motion having been made after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at four minutes to Eleven o'clock.